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, 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. 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 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.
‘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!
By enrolling in the pay rent and build credit program, Experian will receive updated rental payment data every 24 hours. When you pay rent on time, that data is reported to Experian and can be reflected in your credit report. Only positive rental payment information, like full and on-time payments, are added to your credit report with Experian with this program.
Paying rent online has many benefits beyond building credit!
Your credit score may be used in many scenarios - auto loans, mortgages, credit card applications, and more - so it is important to build and maintain credit. To learn more about building credit with on-time rental payments, visit Experian.com or ask your property management company. To learn how to obtain a copy of your credit report or how to manage your credit score, Experian has resources for you.