Paying your rent on time used to do nothing for your credit history. It was only if you went seriously into arrears that your payments would show up on your credit report. But changes at one of the credit bureaus, Experian, mean you can now help your credit history by keeping current with your rent.
Defaults
The only information that used to be reported to the credit bureaus about rent payments was debts that went into collection. If you fell so far behind in your rent payments that your landlord called in a collection agency, this remained on your credit report as a black mark for seven years, probably along with the public record of your eviction.
Timely Payment
In June 2010, Experian acquired a specialized credit bureau called RentBureau that keeps records on more than seven million renters. This means the agency can now incorporate rent payments as an open account on the credit reports that it keeps. If you maintain current payments, this will be reflected positively in your credit history.
Which Landlords
Not all landlords are covered by Experian. If you rent from a large property management company, your payments are probably being reported. If you rent from a small private landlord who has just one or two rental units, it's likely that he isn't reporting your payments. Small landlords do have some resources to be able to report tenant rent histories, but it costs money, so they may only be motivated to do so if you are in default.
FICO Score
While your rent payments may now appear on your report, they can't yet affect your FICO score. Experian will factor your payments into its own proprietary score, the VantageScore, but FICO has not incorporated the new information into its scoring model. Since your FICO score is the one most often used by lenders and other financial institutions to assess your credit, your rental history won't yet help in this regard.
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