For the millions of Americans who have a subprime credit score or no credit score, being invisible credit or having a bad credit score can mean limited access to loans, credit cards and higher interest rates. .
According to a report According to the Consumer Financial Protection Bureau, nearly 20% of the adult population in the United States, or about 45 million consumers, are considered to be invisible or not assessable to credit – with black and Hispanic communities disproportionately considered invisible to credit. .
Fortunately, there are free services, such as *Experian Boost™, which are designed to help consumers improve their credit scores by including positive payment records for certain utilities and subscription services on Experian consumer credit reports. Experian recently announced it will also count monthly rent payments in establishing consumer credit scores.
Below, Select takes a closer look at what goes into calculating your credit score and what you need to know about Experian Boost’s latest addition.
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Experian Boost is a free service that launched in 2019 and works by collecting positive information about your on-time monthly payments for bills such as utilities, some subscription services – and now, rent – to help boost your score credit. And if users are late with their tracked payments, this negative information is not included.
Experian Boost recently announced a new betasaying it would partner with 1,500 rent and lease management companies across the country to include rent payment information in credit reports.
On Experian’s secure site
Average increase in credit score
13 points, although results vary
Affected credit report
Credit score model used
Although Experian does not disclose the specific management companies it will partner with, tenants who pay their rent directly to their property management company – or through platforms such as AppFolio Property Management, Buildium®, Yardi® Breeze and Zillow® Rental Manager – can add qualifying positive rent payments to their credit report, according to Rod Griffith, senior director of public outreach at Experian.
Note that not all rent payments are eligible for the service – payments must be paid online through certain management companies or platforms, not through a third-party money transfer app such as PayPal, Venmo, or Zelle. Rent payments made by cash, money order, or personal check are also not eligible.
When you create a free (or paid) Experian Boost account, you can link it to your checking or savings accounts or credit cards. The service then reviews your payment history for the past two years and adds information about all eligible recurring payments to your credit file.
Keep in mind that there must be at least three recurring payments made within the last six months for this to count. In addition to rent, Experian Boost includes payment information from the Internet, cable and satellite, mobile and landline phones, water, gas, electricity, and some streaming services like Netflix.
According to Experian, 66% of Experian Boost users saw their score increase, an average of 13 points for FICO® Score 8, the score most commonly used by lenders. Those with lower credit scores or limited credit histories have also experienced an increase in their ratings using the product.
Experian Boost is unique in that traditionally all of your payment information – including utility and rent payments and some buy now, pay later loans – is not passed on to the credit bureaus. For example, even if someone paid their electricity bills or rent on time, those payments may not impact their credit rating.
Experian Boost isn’t the only service that lets consumers report their rent payment information. The Mastercard Bilt Rewards is a card with no annual fee that offers its holders 1X rewards points per dollar spent on rent payments (up to 50,000 points per calendar year), no matter where you live or how you pay your rent.
Those who can only pay their rent by personal check can still participate – simply use the Bilt Rewards app to pay your rent and Bilt will send a check to your management company for you.
Cardholders who live in an apartment within the Bilt Rewards Alliance can also pay their rent through the app, receive 1X points per dollar, and choose to have their monthly payments reported to each of the three major credit bureaus. Even if you don’t live in a building associated with the Bilt Rewards Alliance, you can still earn rewards for all of your rent payments online.
While most management companies charge a 3% fee for using a credit card to pay rent, using your Mastercard Bilt Rewards, this tax is cancelled. You’ll also be able to earn 3X points on dining, 2X points on travel, and 1X points on all other purchases, and enjoy a number of travel and dining benefits and consumer protections.
If you pay your rent, utilities, and subscriptions on time each month, you can probably improve your credit score by signing up for Experian Boost. If you happen to be a tenant in one of the properties managed by the 1,500 companies and platforms that Experian has partnered with, your rent payment information will be included in your Experian credit report – and if you don’t aren’t, you can still benefit by having your other one-time monthly payments reported.
*Results may vary. Some may not see an improvement in scores or approval ratings. Not all lenders use Experian credit reports, and not all lenders use scores impacted by Experian Boost.
Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.