Can rent payments influence your credit score? An explainer

livemint.com:

Rent payments do not typically influence your credit score unless they are reported to the credit bureaus such as CIBIL, Equifax or Experian. 

Conventionally, rent payments are not included in your credit report by default, just as for credit cards, loans, or mortgages. 

For example, if Ajay Verma skips his credit card bill, but ensures to pay his rent on time, his credit score will not automatically improve on account of these regular payments. 

But it can be done if he so wishes. There are a few ways to have the rent payments reported to CIBIL, which can then positively affect your credit score so long as you are regular in making these payments. 

There are a number of services which allow tenants to get their rent payments reported to major credit bureaus such as CIBIL, Experian and Equifax. 

For their services, these agencies typically charge a small fee and may even require the cooperation of your landlord for having these payments reported. And once they are reported, timely payments of rent can show responsible financial behaviour and improve your credit score.

ALSO READ: Have poor credit score? Here are 7 simple steps to improve it

It’s vital to note that not all credit scoring models may incorporate rent payments, and the impact on your score can vary based on which scoring model was used. 

Conversely, if you happen to miss your rent payments or make late payments, this could potentially harm your credit score if reported.

So, it is recommended to check with the credit reporting agencies or the service providers directly to understand how rent reporting could impact your credit score in your particular case.

Yes, it can be done but it does not happen by default. So, it needs to be specifically done in order to