BUDGETING

Credit and Rent: How Your Housing History Can Help or Hurt Your Score

For many people, rent is their largest monthly expense. It’s paid consistently and on time, often for years, yet it hasn’t always played a role in building credit. As the age of first-time home buyers continues to rise, that’s starting to change. Understanding how rent can impact your credit score helps you decide whether rent reporting is a useful tool or something to approach with caution.

Traditionally, rent payments were not included on credit reports unless you fell behind and the account went to collections. This meant that making on-time rent payments didn’t help your credit, but missing payments could still cause harm. Recently, rent reporting services have emerged that allow renters to voluntarily report their payment history to credit bureaus.

Rent reporting works by having a third-party service verify your rental payments and share that information with one or more credit bureaus. When payments are reported, consistent on-time rent can contribute positively to your credit profile, like other recurring financial obligations. This can be especially helpful for people with limited credit history or those looking to strengthen their overall profile.

However, rent reporting isn’t always a guaranteed benefit. Not all services report to all three credit bureaus, and not all lenders factor rent history into their decisions. Some services charge a monthly fee, and late or missed payments may also be reported, which could negatively affect your score. Before enrolling, it’s important to understand how the service works and what information will be shared.

Rent can also affect credit indirectly. Missed rent payments can lead to eviction or collections, which may appear on your credit report and significantly lower your score. Even without rent reporting, housing stability plays a role in overall financial health and creditworthiness.

Using rent as a credit-building tool works best when payments are consistent and the reporting service aligns with your goals. For some, it can be a valuable addition to their credit history. For others, focusing on existing credit accounts may make more sense. Knowing how rent fits into the bigger credit picture allows you to make informed decisions and avoid surprises.

Sources:

https://www.investopedia.com/what-a-growing-number-of-renters-are-doing-to-get-closer-to-homeownership-11811546

https://www.cnbc.com/2025/09/15/using-rent-payments-to-boost-credit-score.html?msockid=1c5588e50f7f6b083f349e970e6b6a09