Paying rent on time every month is important for keeping up your end of the bargain, but does it actually help your credit score? Generally, rent payments aren’t reported to credit bureaus, leaving renters without the benefit of timely and consistent payments. But thanks to rent reporting services, renters may have a way to use one of their biggest bill payments to build good credit.
Key Points:
- Landlords don’t typically report rent payments to the credit bureaus, which leaves renters missing out on a prime credit-building opportunity.
- Today, rent reporting platforms are available that serve as middlemen and facilitate the reporting of rent payments to the credit bureaus.
- With the help of these platforms, renters can use one of their biggest bills to build positive credit.
Can Your Rent Payments Help Build Your Credit History?
As mentioned, rent payments are not typically reported to the credit bureaus. If the bureaus are not notified about timely payments, your credit score won’t benefit.
To ensure your rent payments help you build a positive credit profile, you’ll need to involve a third-party service to help.
Services like Chexy, City Lending Centers (CLC), and Landlord Credit Bureau (LCB) can help tenants have their monthly payments reported to Equifax and TransUnion. This can positively impact your payment history, which is the most important factor in the calculation of your credit score. It’s also a great way to demonstrate financial responsibility without taking on new debt.
Learn more: Rent Reporting
What Services Report Rent To The Credit Bureaus?
A handful of services are available to renters in Canada to help them report their rent to the credit bureaus for the purpose of building good credit.
| Chexy | LCB (Via FrontLobby) | City Lending Centers | |
| Availability | Canada-wide | All provinces except Quebec | Canada-wide |
| Credit Bureau(s) Reported To | Equifax Canada | Equifax Canada | Equifax Canada |
| Historical Rent Reporting? | No | No | Yes (up to 24 months) |
| Monthly Fee | 1.75% credit card transaction fee | ~$4/month (or $48/year) | $15 or $30/month |
| Landlord Involvement Required? | No (only landlord info is required) | Yes (landlord must register on FrontLobby) | Yes (landlord must verify rent payments) |
Landlord Credit Bureau (LCB)
The Landlord Credit Bureau is a consumer reporting agency that helps tenants manage rental histories and build credit. Through its platform, landlords can report rent payments to the credit bureaus. Through consistent rent payments, tenants can benefit from improved credit scores and a verified rental record that future landlords can use during screening.
Tenants can also view or dispute their records, ensuring transparency and accuracy in the rent reporting process.
How To Use LCB To Report Rent Payments
To get started, a tenant should create a free account with LCB. With your account, you will have access to your Tenant Record, where you can view your payment details. You can also invite your landlord to join LCB and view your Tenant Record as well. Here’s what you can expect when you open an LCB account:
- Initiate Rent Reporting.
- LCB will report your monthly rent payments to Equifax.
- A registered trade line will appear on your credit report.
- Your credit score may improve as you make on-time rent payments.
Chexy
Chexy is a rent reporting platform that helps tenants build credit by reporting on-time rent payments to Equifax. One of the unique things about Chexy is that landlord participation is not required; instead, tenants can enroll independently.
With Chexy, you can also use your credit card to pay your rent. Since credit card payments are reported to the credit bureaus, this offers a way to build good credit, as long as payments are made on time every billing cycle. Plus, if you use a rewards credit card, you can earn points with every rent payment you make.
How To Use Chexy To Report Rent Payments
To use Chexy to have your rent payments reported, do the following:
- Create an account using your name, email, and password.
- Choose whether you want to pay your rent using your credit card or opt for the credit-building and rent reporting feature.
- Add your lease details, payment method, and upload your rental agreement.
- Select the day you’d like to pay rent and activate credit-building if desired.
- Enter your monthly rent amount, due date, and lease end date.
Learn more: Chexy Review: Pay Your Rent With A Credit Card
City Lending Centers (CLC)
City Lending Centers is a rent reporting service that helps tenants build credit by reporting on-time rent payments to the credit bureaus. CLC verifies monthly rent payments directly with landlords and reports them as a Tier-1 trade line, which can have a positive effect on a tenant’s credit score.
CLC’s rent reporting program costs $15 to $30 per month, depending on the plan you choose. Landlord participation is required, since they must verify rent payments.
How To Use City Lending Centers To Report Rent Payments
Using CLC for rent reporting is easy and involves the following:
- Tenants enroll by providing basic information, including ID and rent amount
- Tenants continue paying rent as usual.
- CLC will contact the landlord to verify rent payments to ensure that the payment history is accurate.
- Once verified, CLC reports the rent payments as a Tier-1 trade line to credit bureaus, which can positively impact the tenant’s credit score.
How Rent Payments Can Help Build Your Credit
Rent payments made through rent reporting services can help you build your credit by impacting two key factors: payment history and credit age/history.
Payment History
Your payment history is the most important factor in your credit score. When you use rent reporting services, your on-time rent payments are reported to the credit bureaus, just like loan or credit card payments. Consistently paying your rent on time can improve your credit score and show future lenders that you’re a responsible borrower.
Credit Age/History
Credit age or credit history length refers to how long you’ve been managing credit accounts. An older average credit account age is a good thing for your credit score.
When your rent payments are reported, it can help establish or lengthen your credit history, especially if you don’t have many other accounts. Combined with a record of timely payments, a longer credit history can boost your credit score and make you more attractive to lenders.
What Are The Perks Of Rent Reporting?
The benefits of having your rent reported to the credit bureaus are as follows:
| Helps Establish A Payment History | Rent payment reporting is especially helpful to renters with thin credit profiles, those who are new to Canada and people who are trying to rebuild their credit from past debt problems. |
| Better Access To Credit | As you rebuild your payment history, it’ll likely become easier for you to access large amounts of credit, good payment plans and low-interest rates. |
What Are The Potential Drawbacks Of Rent Reporting?
Although there are several credit-related benefits of landlords being able to report your rent, it’s equally important to watch out for these potential drawbacks:
| May Damage Credit | Just as on-time rent payments can help build a positive payment history, late or missed rent payments can do the opposite. |
| Monthly Fees | Most rent reporting platforms charge a monthly or annual fee. |
| Landlord Participation May Be Required | Some platforms need landlords to verify rent payments or actively participate. |
Other Ways To Use Your Rent To Build Credit
Another way you may be able to pay your rent and build good credit is by using a credit card.
As noted, paying your credit card bills on time every month is a great way to steadily build good credit. You can also benefit from points with every rent payment you make if you carry a rewards-based credit card.
However, landlords don’t typically accept credit cards as a form of rent payment. In this case, you may want to use a third-party service that helps you use your credit card to pay your rent. Here are a couple of platforms to consider:
| Service | Fees | Credit Reporting | |
| Letus | N/A | Yes (for an additional fee) | Learn More |
| Chexy | 1.75% | Yes (free with Credit Builder) | Learn More |
Learn more: Can You Pay Your Rent With Your Credit Card In Canada?
Bottom Line
Paying rent on time is not only essential for sticking to the terms of your rent agreement, but it can also be a great way to build good credit with the help of third-party rent reporting services. Traditionally, rent payments went unnoticed by credit bureaus, but renters now have the opportunity to turn one of their biggest monthly expenses into a credit-building tool.
