Rent can automatically be included in credit scores via a new beta test rolled out by Experian. The company says it improves qualified renters scores by 14 points.
COSTA MESA, Calif. – Experian launched a beta release of Experian Boost that allows consumers to contribute qualifying, positive residential rent payments directly to their Experian credit file. The benefit is free to renters who sign up, though their landlord must participate in the program.
Based on preliminary analysis, Experian estimates:
- 66% of consumers will see an instant increase in their FICO Score
- A FICO Score will improve nearly 10 points, on average, for those new to Experian Boost
- A FICO score will improve nearly 19 points for new users who also add other eligible, positive payments, such as telecom, utilities and video streaming services
- Consumers with thin credit files or low FICO Scores see an improvement of about 14 points
Downsides to the program
The biggest downside involves the lender and the credit scoring company a lender prefers to use. Experian Boost won’t help a renter if their lender prefers other companies, such as Equifax and TransUnion.
It also will have less impact for renters who use credit cards for most purchases rather than cash or debit cards. Since they already have a credit history from the card use, the addition of more on-time payments via Experian Boost won’t have a similar dramatic effect.
Experian Boost: How it works
In the beta release, consumers who rent from over 1,500 of some of the largest U.S.-based property management companies – and who pay their rent directly to their property management company or through platforms like AppFolio Property Management, Buildium, Yardi Breeze and Zillow Rental Manager – can add qualifying positive rent payments to their Experian credit file through Experian Boost.
Once a consumer creates an Experian account and enrolls in a free or paid Experian membership, the consumer can opt-in and allow access to the checking, savings or credit card accounts used to pay rent so that Experian can identify residential rent payments within the qualifying amount range.
Once the consumer verifies three qualifying rent payments in the last six months – with at least one in the last three months – they can be added to the consumer’s Experian credit file, assuming they don’t already have rent on their credit file through Experian RentBureau or an active mortgage tradeline.
Once connected, future qualifying rent payments can be automatically added to a consumer’s Experian credit file.
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