Improving your credit score can feel like a daunting task, but we have some great news! There is an easy way to boost your credit: paying your rent online. While it’s impossible to predict exactly how much reporting rent payments will improve your credit score, one study found that eight in 10 subprime borrowers saw an increase in their credit score after just one month.
To see a similar increase in your credit score, start paying your rent online. Doing so shows credit bureaus what they are looking for, ensures your payments are reported, and can combine with credit card payments to increase your score even more. Here’s how.
Shows Credit Bureaus What They Are Looking For
What actually goes into a credit score? There are several things that make up your score. Experian, for example, determines credit scores through the following elements:
- Use of credit cards
- Applications for new loans and credit
- Payment history
So, how does paying rent online contribute to this? When you pay rent online, those payments become part of your payment history. The more often you pay on time and in full and continue to do so, the better your score becomes.
Ensures Your Payments Are Reported
While simply paying your rent on time won’t help you build credit, according to Bev O’Shea at NerdWallet, “reporting your rent payments can help you build credit—especially if you are new to credit or do not have a lot of experience using it.”
So how do you make sure your rent payments are reported? At Park Plaza Apartment Homes, we offer an online rental payment system that reports information to the credit bureaus. That way, credit bureaus receive a record of your on-time rental payments. This contributes to your good credit.
Combines with Credit Card Payments for Higher Score Gains
To give your score an extra boost, consider using a credit card made specifically to pay your rent. According to LaToya Irby, credit expert for The Balance, paying your credit card balance in full each month after using it to pay your rent will help you improve your credit score. While you don’t have to pay your rent with a credit card, it can be a nice little boost to your credit score in combination with the benefits of paying your rent online.
Give your credit score a boost by paying your rent online. At Park Plaza, we make this easy through our resident portal. As you do pay online, your payments are reported to credit bureaus, showing them exactly what they are looking for. Plus, if you choose to pay rent with a credit card, you may increase your score even more. Boosting your credit score doesn’t seem quite as intimidating anymore, does it?