Did you make improving your credit score a goal for 2020? Paying your rent online can help! In a 2017 study, TransUnion tracked the credit scores of 12,000 renters who reported their rent payments to credit bureaus over the course of a year. They found that the renters’ scores rose an average of 16 points within six months! The most significant benefit went to those whose scores were below 620.
Paying your rent online ensures that your payments are reported, provides credit bureaus with the information they need, and can increase your credit even more when paid with a credit card. It’s that simple!
Ensures Your Payments Are Reported
Paying your rent will not automatically improve your credit. â€œBut reporting your rent payments can help you build credit—especially if you are new to credit or do not have a lot of experience using it,” says Bev O’Shea at NerdWallet.
Thankfully, Somerset Apartment Homes offers an online rental payment system that reports information to the credit bureaus. That way, credit bureaus receive a record of your on-time rental payments, which contributes to your good credit. In order to opt in for the credit reporting, follow these steps:
- Log in to your account through the resident portal and click on “Make a Payment Now.”
- Select “Build your credit history by opting in to credit reporting.”
- Enter your information in the credit reporting fields. Be sure to select “yes” for month-to-month lease if you have one, or select “no” and a lease end date.
Provides Credit Bureaus with the Information They Need
Have you ever wondered what actually goes into a credit score and why paying your rent online contributes to it? Credit bureaus vary in what they prioritize, but one thing is common: Payment history matters. At Experian, for example, the following elements are also taken into account:
- Use of credit cards
- Length of payment history
- Applications for new loans and credit
- New accounts recently opened
Paying rent online allows those payments to become part of your payment history. As you meet your payment deadlines, your credit score increases.
Increase Score Gains with Credit Cards
When it comes to making payments online, you have many electronic payment options. However, if you want to improve your credit score, then paying your rent with a credit card is the way to go.
According to LaToya Irby, a credit expert for The Balance, residents should “open a credit card and use it to pay [their] rent.” As residents pay in full each month, “the timely credit card payments will help boost [their] credit score.”
If you’re interested in improving your credit score, make it simple by paying your rent online using our resident portal so that we can report your payments to the credit bureaus. As an extra bonus, consider paying with a credit card to further improve your score. You’ve got this!