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How to Build Your Credit by Paying Your Rent on Time

When it comes to buying a house for the first time, the one universal thing we often hear people say is how much they wish their rental payment history would help them buy a home and build their credit. But can it?

The average millennial’s credit score is just 625–lower than any generation that came before them. This means that many of those in the 25-34 age group are choosing to rent instead of buy homes. 

Between nagging student loan balances and an average of $15,000 in credit card debt, it’s no secret that this demographic struggles with their financial identities.

However, there is an incredibly useful tool that few people know about that can achieve a goal that so many have wished for: the ability to build a solid credit history every time you cut your landlord a check.

That’s right: you can build your credit simply by paying your rent on time. All it takes is a little creativity. 


New services from reputable companies such as the credit reporting bureau Experian offer products that allow people who rent to have their monthly rental payments reported to their credit reports each month in the same way that credit cards and loans are.

With more apartment and leasing agencies offering rental payments and leases online, many rental payment web portals already report to Experian.

According to Experian RentBureau, the portals currently reporting to the bureau include ClearNow, RentTrack, PayYourRent, and PayLease. Other companies also work with or report to Experian RentBureau.

If you rent from a private landlord, you may be able to sign up for any of these services so that your monthly rental payment is reflected on your Experian credit report.


 Rental Kharma is one third party service that reports only to TransUnion currently, but according to their website, plans to begin reporting to Experian and Equifax in the near future.

For a nominal monthly fee, renters work with Rental Kharma and the landlords to establish an ongoing reporting arrangement that can not only report on-time monthly payments starting in the month the user signs up for the service, but for up to two years prior as well.

Credit Cards

Another option that many people do not consider is paying their monthly rent payment with a credit card instead of with a check or automatic bank draft (and then paying it off every month, of course).

This may only be an option if you rent from a larger leasing agency or real estate development firm, as individual landlords are likely unable to accept credit card payments.

If you can pay your rent using a credit card and pay the balance in full each month, you will easily build your credit and increase your credit score with very little effort. 

Get Primed to (Finally) Buy a House

While we can’t guarantee that these efforts to build your credit will magically transform you into a homeowner, they certainly won’t hurt your chance of achieving your home ownership goals–and they are likely to bring your dreams even more within reach. 

Efforts to build your credit and make it better can make it a whole lot easier for you to buy a house, so if this is a goal for you in the future, adding your rent to your credit report or paying your rent with a credit card isn’t a bad idea (so long as you pay the card off every month). 

To learn more about what it takes to buy a home, visit NLC Loans for all the information you need to make this life changing decision.