Why Building Your Credit History Is Important
If you have ever tried to apply for a credit card, a car loan or other major purchase and been denied because you have no credit history, you know how important having credit can be. A credit history is a necessity in today’s economy. Yet, how do you get one when you have never had one?
Pay your Rent
Your rental payment information can be included as part of your standard credit report and may be incorporated into certain credit scores. That’s right! Experian is one of the first and only credit reporting agencies to allow positive rental payment history to be reported. This is HUGE! We’ve all been taught not to accrue debt, to pay cash for everything and yet, when it comes time to buy your first home, you have zero history for the lenders to work with. Now, you can keep your debt-free, cash-only status and start to establish a positive credit history.
How it works.
- If you currently rent or are considering renting, ask your property management company if it reports rental payment data to Experian RentBureau.
- If you rent from an individual landlord or property management company that does not report data, sign up through a rent payment service working with Experian RentBureau. These services allow for the payment and collection of your rent electronically and you have the ability to opt-in to reporting your rental payment history to Experian RentBureau.
We verified all of this with Josh Egnoski of American Wholesale Mortgage and he was just as excited as we were to have this knowledge. The buyer he was working with increased her credit score enough to get a pre-approval letter to purchase her home. Awesome!!
What if it doesn’t help you get prequalified? There are still benefits to using positive rental history to establish a pattern of good credit. Having rental payment information in your credit report can be useful if you rent again. Landlords prefer tenants who can show a history of paying on time!
Now, there are specific vendors that work Experian RentBureau and you can find the full list and additional information such as what fees may apply on Experian’s website. This may not be an option for everyone. However, we think it is well worth the time to read more about it and review all of the information before you decide.
If you have been sitting on the sidelines thinking homeownership was out of reach, give us a call. We would love to see if this information can start you on the path to home ownership.