Creditors use a credit score to determine the financial risk of lending money, so if you’re looking to make a major purchase or rental, buy a car or rent an apartment, creditors can assess the likelihood of being paid back (on time). Credit is important when you are looking make an important purchase, like buying a car or renting an apartment. However, maintaining a good credit score and building credit is not always easy, particularly for those without a long credit history. There are many factors that can hurt a credit score. We know that it can be tough to rent an apartment with a low or no credit score, which is why Pangea Real Estate offers the ability to pay rent and build credit.
Does paying rent build credit? – YES!
Since the mortgage crisis of 2009, there has been a noticeable increase in the amount of consumers choosing to rent property. According to TransUnion research, there were about 5 million more renter households in 2013 than were reported in 2007. Thanks to the introduction of the pay rent to build credit system, it is no longer necessary to own property and pay a mortgage to build a healthy credit history. A majority of the renter population is capable of benefiting from this new system by paying rent online and having it included in credit reports. Within just the first month of signing up, about seven out of 10 renters encountered a positive VantageScore credit score change.
Until recently, rent payment was not factored into your credit score. Pangea Real Estate offers the ability to pay rent and build credit by paying rent online and on-time. We submit rental payment information, including the amount, the timeliness of the payment, and any balance owed, to Transunion to include in credit reports. Rental payment information will then appear on consumer files alongside their other financial obligations such as auto loans, credit cards, and student loans. The inclusion of rental payment history in credit reports allows you to build your credit score through timely rent payment.
Furthermore, late rent payments do not negatively affect credit score. Only positive, on-time rental payments are added to credit reports. ‘Pay rent, build credit’ programs are particularly useful for anyone who rents, particularly non-credit-active and cash-based customers. These programs are also useful for young people in their 20’s who have little or no credit history, as they allow them to begin building credit consistently. With our easy-to-use online rent payment portal, Pangea Real Estate makes building your credit simple!
Paying rent online has many benefits beyond building credit!