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Does paying rent build credit?

Paying rent can help you build your credit score if you pay on time.

Some landlords report rent payments to a rent-reporting service, while others do not report. If you are a tenant, ask your landlord if they report payments. If they don’t use a service, you may want to sign up for the service and report your payments. Over time, you can build credit by paying rent.
Using a rent-reporting company can save you time when you link the service to your checking account, for safe and convenient payments.
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How to report your rent payments

Building credit is important for everyone. A good credit history and credit score can help you get loans, new credit, or even a job, as many employers will check a job applicant’s credit as apart of the hiring process.
Credit reports don't typically include rent payments because rent isn't considered debt. However, in recent years the credit bureaus have recognized that today’s renters who pay on time want to boost credit by paying rent.
If you’re a renter and would like to get your paments reported to the credit bureaus, here are some steps to take:
Speak with your landlord. There are now services that let landlords report their tenants’ rent payments, thus helping the tenants build credit. Ask your landlord if he or she is willing to report your rent payments. If your landlord doesn’t subscribe to this service, there are services which tenants can report their rent to.
Research rent-reporting services. There are now several rent reporting services renters can join. The credit bureaus Experian and TransUnion also offer rent reporting.
Select and set up service. Once you’ve done your research just choose the service you prefer. There may be a fee to join.
Confirm payments to landlord. Most rent-reporting services are designed to accept online rent payments from tenants. A fee is typically deducted, and the remainder of the payment is sent to the landlord. Always confirm with your landlord that the rent payment was received.
Verify payments with credit bureaus. Equifax, Experian, and TransUnion are continuing to offer free weekly online credit reports thorough

Will missing a payment affect my credit score?

If neither you nor your landlord report your rent to a rent-reporting service, it’s unlikely that your credit score will be affected by a missed payment.
If you are using a rent-reporting service on your own or one that is managed by your landlord, then yes, missing a rental payment will negatively affect your credit score when your missed payment is reported to the credit bureaus.
However, don’t let this stop you from signing up for rent-reporting. Making on-time payments is something to be proud of and it will increase your credit score!

Can I report past rental payments?

Some rent-reporting services provide tenants with an option to report past rent up to a specific number of past payments.

How soon will my credit score improve?

You can build credit by paying rent, but it could take up to a year to see the full benefit of the reporting reflected in your credit score. Reporting on-time rent payments could increase your credit score up to 40 points.
According to, before you start reporting your rental history to the credit bureaus, it's important to know that your landlord might report past payments as well as your future payments, so you should consider if you have had any late or missed rental payments that could hurt your score. You should also consider how confident you are in your ability to make on-time payments in the future.

How are credit scores calculated?

Credit scores are calculated based on a numeric scoring system that is unique to the scoring company. The most widely used credit scores are FICO scores, which were developed by Fair Isaac Company, Inc.
Payment history. Payment history accounts for 35% of a FICO Score. As you make payments on your debt, your credit score may fluctuate.
Amounts owed. Your total outstanding debt is known as “amounts owed,” and accounts for 30% of a credit score.
New credit applications. These account for 10% of the score. New applications typically result in a small temporary decrease in score.
Credit mix. The types of credit you have are called “credit mix” and this counts toward 10% of a credit score.
Length of credit history. This accounts for 15% of your FICO Score.

Additional strategies for improving your credit score

Reporting your rent payments can help you build credit, but if you want to improve your credit score, here are some tips:
  1. Paying bills on time
  2. Paying off your credit card balances
  3. Open new credit accounts only when needed
  4. Don’t close unused accounts
  5. Dispute Inaccuracies on your credit reports
  6. increase your credit limit
  7. Use credit monitoring and credit score monitoring services to check your progress

Is reporting your rent worth it?

According to the U.S. Government Accountability Office, roughly 45 million Americans lack credit scores simply because those data points do not exist for them, which limits their ability to get a loan to buy a house or car.
If you are certain that you will be able to pay your rent on time, then yes, reporting your rental payments is worth it. Reporting your rent can be an excellent strategy to help build credit.
However, if you miss a payment, your credit score could drop significantly.

Why savvy consumers choose CU SoCal

For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.

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