There are more benefits to online rent than how convenient it is. It can also help you improve your credit score! In 2017, TransUnion studied 12,000 renters who reported their rent payments to credit bureaus over the course of a year. The study found that renters’ scores rose an average of 16 points within just six months, with those who started with a credit score below 620 seeing the greatest improvement.
Do you want to see a similar increase in your credit score? You can do just that by paying your rent online, which shows credit bureaus what they are looking for, ensures your payments are reported, and can combine with credit card payments to increase your score even more. Here’s how.
Shows Credit Bureaus What They Are Looking For
There are several things that go into a credit score, and it is continuously updated with new information based on your activity. Experian determines credit scores through the following elements:
- Payment history
- Applications for new loans and credit
- Use of credit cards
So, when you pay rent online, those payments become part of your payment history. This can then help improve your credit score as you pay on time and in full. Plus, the more on-time payments you have, the more your credit score will improve.
Helps You Report Your Rent Payments
While just paying your rent will not necessarily help you build credit, reporting your rent payments will. According to Bev O’Shea at NerdWallet, this is especially helpful if you are new to credit or have a low credit score.
So how can you report on your rent payments? At Northwind Apartments, we have an online rent payment system that automatically reports information to the credit bureaus, which gives them easy and real-time access to your timely rental payments. In turn, this will improve your credit score.
Combines with Credit Card Payments for Higher Score Gains
Using a credit card to pay your online rent can improve your credit score even more. If you need a big boost to your score, consider opening a credit card that you only use to pay your rent, then pay the credit card balance in full every month. According to LaToya Irby, credit expert for The Balance, “the timely credit card payments will help boost your credit score.”
It’s not necessary to pay your rent with a credit card, but it can be a nice little boost to your credit score in combination with the other benefits associated with paying online rent.
Improve your credit score by paying your rent online through the resident portal. As you do so, your payments are reported to credit bureaus, showing them exactly what they are looking for. Plus, if you choose to pay rent with a credit card, you may increase your score even more. Good luck with the credit score boosting!