Maintaining a high credit score is important for your financial health, and paying your rent online can give your credit score the boost it needs. A 2017 TransUnion study of 12,000 renters who reported their rent payments to credit bureaus found that those who did were able to improve their credit score by an average of 16 points within six months. Those with credit scores below 620 benefited the most from doing so.
Want to see similar results? Pay rent online and ensure that your payment is reported to credit bureaus accurately and consistently, showing credit companies the kind of payment history they like to see. When done in tandem with credit card payments, your credit score could be better than ever. Here’s how it works.
Ensures Your Payments Are Reported
According to Bev O’Shea at NerdWallet, “Simply paying your rent will not help you build credit, but 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.”
Paying your rent is easy to remember, but taking the extra step to report your rent payment is easy to forget. Luckily, at California Palms, we offer a rental payment system that reports information to credit bureaus for you. That way, you have a convenient way to make payments, and credit bureaus receive a record of your on-time rental payments, which raises your credit score.
Shows Credit Bureaus What They Are Looking For
The key to improving your credit score is knowing what credit bureaus look for. Experian, for example, determines credit scores through the following elements:
- Use of credit cards
- Payment history
- Applications for new loans and credit
Pay rent online to make sure your rent payments become part of your payment history. When you pay on time and in full, your payment history becomes all the more impressive.
Combines with Credit Card Payments for Higher Score Gains
Have you ever considered using a credit card specifically to pay rent? Taking advantage of online payments to use a credit card means you get to make two timely payments each month.
“Open a credit card and use it to pay your rent . . . then pay your credit card balance in full each month,” says LaToya Irby, credit expert for The Balance. “The timely credit card payments will help boost your credit score.” Of course, you do not need a credit card to pay rent online, but it’s an easy way for you to improve your credit score by making a payment that you already make on a monthly basis anyways.
So next time you need to pay rent, consider doing it online through our resident portal. If you’re feeling adventurous, use a credit card to watch your credit score go from good to great. Good luck using your rent to improve your credit score!