Because your rental payment history is now part of your standard credit report, it may be incorporated into certain credit scores, such as VantageScore®.
This will allow many who previously didn't have a credit history to become scoreable for the first time and begin building credit history through the responsible payment of rent.
Each credit bureau provides more detail on where and how rental payment history is used and how it might affect your credit score. For more information please visit:
Rental "tradelines" are like any other entry on your credit report, and they will affect your score in similar ways. This Credit.com blog entry has a good summary of how your credit score might be calculated. Some things to note:
- Your tradeline will show up as "RentTrack" on your credit report.
- Any new tradeline indicates you are "shopping for credit", and may initially lower your score before regular on-time payments bring it back up.
- A rental tradeline is treated like a charge card, not a loan. So you won't have a large outstanding debt for the term of the lease.
- This rental tradeline is a revolving account, with a zero balance- having a zero balance on your rental tradeline will POSITIVELY effect your debt to income ratio, but will show as more potential debt.
- We report "positive" payments - only the payments you make - we do not report late payments as you may pay your property manager directly. The bureaus will "auto-fill" the other months as we continue to report you as "in good standing."
- The property manager may report a balance if you break your lease or leave owing money. This is a way your credit can be negatively affected.
As with all tradeline types, time is the main factor in your score - you must show an ability to pay consistently time after time to see an improvement in your score.