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Your credit score is a three-digit number between 300 to 850 that’ll impact your ability to rent an apartment, get a new credit card, and even a new car. It’s usually advised to have a credit score around 629 or higher, but having one closer to 800 can be highly beneficial for credit borrowers.
That’s why we provided the tips you can implement today to increase your credit score to 800 and above, as well as how long it will take you to reach this goal.
How to Get an 800 Credit Score
Having an excellent credit score is very much possible, especially if you’ve already been working to improve your credit health. Here are seven steps you can implement to get an 800 credit score:
1. Check Your Credit Score
Your credit score is influenced by five factors: your payment history, credit utilization, account age and type, new accounts, and credit mix. Each factor is weighted differently for both FICO® and VantageScore, with payment history having the most impact on your overall credit score.
Knowing what’s influencing your credit report can make it easier to create a plan for how to get your credit score closer to 800. Whether that’s paying down existing debt or making consistent and on-time payments, the journey to excellent credit requires knowing what you need to work on in the first place.
Check your credit score through any of your credit providers or visit sites like myfico.com for a free FICO® scores estimate.
2. Make On-Time Monthly Payments
Payment history consists of 30% to 35% of your credit score, so if you miss a payment, it can make achieving your goal of an 800 score harder. If making payments has been difficult in the past, you can still increase your credit score by consistently paying the minimum amount towards your bills moving forward until you can afford to make larger payments.
The good news is almost all credit providers offer payment plans or financial assistance for their customers. All you have to do is reach out to your credit provider to discuss your options and plan out how you can get back on track.
3. Keep Your Credit Utilization Below 30%
Credit utilization, also known as credit usage, is the amount of available credit that’s being used compared to how much available credit there is in total. According to Experian, credit borrowers are advised to keep their credit utilization to 30% or less. Going over that can result in a high debt-to-income ratio or too high of an outstanding balance on your card.
Most credit card companies prefer borrowers to keep their information up-to-date, such as your annual income and whether you’re currently renting or own a home. If you applied for a credit card a few years back and now have a higher income, you can then update your profile and see if they’re willing to increase your available credit. While it’s not advised to use this new credit right away, this can help increase your credit score since you’ll technically be using less available credit.
You can also request a credit increase for certain credit cards, especially if you’ve exhibited good credit borrowing habits over the past year. Both options will allow you to improve your credit utilization as long as you refrain from using credit cards for upcoming purchases.
4. Consolidate Your Current Debt
Consolidating your current debt is a great way to start tackling existing debt with less payments and a lower interest rate. Let’s say you have two credit cards, each having a different balance and interest rate. Instead of making two separate payments on each card, you can get a credit repair loan that allows you to pay off the existing balance of both accounts with one loan. Now you’ll only have one payment each month with one interest rate, making it much easier to pay down your credit card balance in less time.
This approach can also be applied to student loans. When you refinance your student loans with one main loan, you can pay down the balance much faster with a lower interest rate, removing the stress of making separate payments for each student loan.
5. Report Your Monthly Bills to a Credit Bureau
Thanks to tools like CreditBoost* and Experian Boost
, you can report certain bills to a credit bureau to help you improve your credit with payments you’re already making. With CreditBoost, renters can report their on-time rent payments directly to TransUnion to help build their FICO 9, FICO XD, and VantageScore credit scores with ease.
For a small fee of $3.95/per reported month, you can easily report past and future rent payments to one of the three main credit bureaus to help get you that much closer to your goal of attaining an 800 credit score. All you have to do is invite your landlord to Avail to set up your account. Then, once you’re ready to make a payment, you can turn on CreditBoost to start contributing to your credit immediately.
6. Avoid Closing Old Credit Accounts
Contrary to popular belief, closing an old credit account can actually harm your credit score rather than improve it. By closing an account, you’ll end up reducing your overall credit availability, which then increases your credit utilization percentage. Another consequence of closing an older credit account is having the average age of your accounts decrease. On average, the total accounts on your credit report should average more than three years to provide creditors a reliable timeframe of your credit habits.
To avoid that from happening, you can occasionally make payments with an older credit card to avoid the account from closing. However, you should try to pay off the balance before the end of the card’s statement period to avoid having your score decrease by a few points.
7. Avoid Too Many Hard Credit Inquiries
It may be tempting to open a new credit card or apply for a personal loan, but it’s important to avoid too many hard credit inquiries. Hard credit inquiries occur when a creditor requests to look at your credit file to determine if they want to approve you for a new line of credit.
Having too many hard inquiries on your credit report can make it seem like you’re consistently looking to open more lines of credit, resulting in lenders being wary of taking you on as a client. If you plan on financing purchases soon or opening a new line of credit, you can space it out throughout the year to avoid decreasing your credit score.
How Long Does It Take To Go From a 700 to 800 Credit Score?
The time it takes to increase your credit score from 700 to 800 varies depending on how aggressive you approach boosting your credit. If you make consistent payments towards your debt and use tools like CreditBoost to report rent payments, you can expedite the process of improving your credit score.
However, it can take up to two years to remove hard inquiries from your credit report or any additional negative remarks that brought down your credit, so be prepared to incorporate long-term credit-building actions like those listed above to help.
Improve Your Credit Health With CreditBoost
Now that you know how to get your credit score to 800, it’ll be that much easier to accomplish your goal and work towards a brighter financial future. Take the first step towards improving your credit by reporting all on-time past and current rent payments through CreditBoost. Create an account to get started today.
*CreditBoost results may vary by individual.
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Searching for an apartment is an exciting experience, especially if you’re moving to a new city or on your own. However, the process to get approved for an apartment can be tricky if you have no credit or a credit score below 629.
To increase your chances of getting your application approved for your dream apartment, it’s important to know what landlords are looking for and how to practice good credit borrowing habits. Here’s everything you need to know about what credit score is needed to rent an apartment.
What Is a Credit Score?
A credit score is a number between 300 to 850 that credit bureaus provide borrowers to let them better understand a person’s creditworthiness and credit reliability. Your credit score is influenced by various factors, such as your payment history, credit utilization, account age and type, new accounts, and credit mix.
There are different types of credit scoring models — like FICO 9 and VantageScore — that weigh these factors differently, but they all work to rate your creditworthiness. Landlords look at an applicant’s credit report to better understand the way they handle their finances, view their payment history, and see how much debt they currently owe.
What Credit Score Do I Need to Rent an Apartment?
To rent an apartment, landlords typically require renters to have a minimum credit score of 629. But each landlord and property management company vary in their overall requirements, since a credit score alone doesn’t provide a full picture of who you are as a renter.
If you currently have a lower credit score but make on-time payments towards your bills and have an income of three times the rent amount, then you can still get approved for an apartment. But it’s advised to get your credit score closer to the 700s to easily find your next home without any sudden delays.
What Do Landlords Look at On a Credit Report?
When landlords request a credit report, they check to see if you can afford the set rent price and have a history of making payments on time. In addition to your credit score, they may also look at the following:
- Credit utilization: Most landlords don’t focus too much on how much available credit you’ve used. However, if you owe too much debt already, then this can deter them from accepting your application out of fear you won’t have enough money left over to pay rent.
- Account summaries: If you have multiple accounts open, especially ones with any amount past due, then this can indicate an inconsistent history of making required payments on time.
- Total tradelines: Payment history is the biggest contributor to your credit score, as well as what landlords pay the most attention to on your credit report. If you’ve been missing payments on current tradelines — or existing lines of credit — then this will usually result in your application being rejected.
Can You Rent an Apartment With a Low Credit Score?
Although it’s very possible to rent an apartment with a low credit score, you’ll need to make at least three times the rent in monthly income and illustrate good credit borrowing habits so you can prove to your landlord that they can trust you to make timely rent payments throughout your lease. A landlord may also require you to find someone you trust to become a co-signer on your lease in case you’re suddenly unable to make payments.
How to Improve Your Credit Score as a Renter
As a renter, it’s important to always practice good credit borrowing habits to increase your credit score. In addition to making on-time payments on your bills and keeping your credit usage below 30%, renters can begin reporting rent payments to TransUnion with rent reporting tools like CreditBoost.
With CreditBoost*, you can contribute to your FICO 9, FICO XD, and VantageScore credit scores for $3.95/per reported month. This can be especially beneficial if you currently have little to no credit and are looking to build a strong credit history through the rent payments you’re already making. You can also report your utility payments to a credit bureau or explore credit builder loans if you’re looking to improve your credit score without a credit card.
Report Your Rent Payments With CreditBoost
Now that you know what credit score is needed to rent an apartment, the next step is to practice good credit habits to increase your chances of getting approved for your next place. To start, you can invite your landlord to Avail to set up your account and begin reporting your rent payments through CreditBoost. Whether you’re moving into a new rental or still paying rent at your current place, you can start improving your credit health through each on-time rent payment.
Create an account or log in to turn on credit reporting today.
*CreditBoost results may vary by individual.
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A VantageScore is a tri-bureau credit scoring model that was developed by Experian, TransUnion, and Equifax to compete with FICO®. This credit score model has gone through four major variations since its official launch in 2013, with VantageScore 4.0 being the most recent version.
In this article, we’ve provided an in-depth look at the VantageScore credit scoring model, how it works, and the importance of this credit score.
How Does the VantageScore Credit Model Work?
VantageScore previously refrained from using percentages to illustrate the importance of each aspect of your credit that’s calculated into your final score. However, it recently released an updated breakdown indicating how important each factor is to one’s overall score.
- Payment history (40%)
- Age and type of credit (21%)
- Credit utilization (20%)
- Size of balances (11%)
- Inquiries/new accounts (5%)
- Amount of available credit (3%)
Similar to the FICO® scoring model, your payment history has the biggest influence on the current state of your VantageScore credit score.
What Is the Difference Between VantageScore 3.0 and VantageScore 4.0?
VantageScore 4.0 introduced three major changes to its credit scoring model since the release of the VantageScore 3.0. The following changes are:
- Uses trending data from the three major credit bureaus (TransUnion, Experian, and Equifax) to get an in-depth view of a person’s borrowing habits and payment history.
- Does not weigh tax liens and civil judgements as heavily as the VantageScore 3.0 credit scoring model.
- Allows people who would normally be neglected by traditional scoring models build credit without a credit card.
Overall, the newer version of VantageScore adjusts to current credit-borrowing trends to provide lenders and landlords with an accurate view of a person’s creditworthiness.
What Is a Good VantageScore?
VantageScore provides a credit score that ranges from 300 to 850. Scores between 661 to 850 are considered ideal, while scores below 660 need improvement.
If you’re currently in the process of building your VantageScore credit score, you can work on paying down any existing debt or use tools like CreditBoost* to begin reporting on-time rent payments directly to TransUnion. For a small fee of $3.95 per reported month, you can contribute past and future rent payments to your VantageScore credit score to help focus on your credit health through payments you’re already making each month.
All you have to do is create an account and invite your landlord to Avail. Once they’ve set up their account and begin collecting rent online, you can start reporting your on-time rent payments right away to contribute to your FICO 9, FICO XD, and VantageScore credit score.
VantageScore vs. FICO® Score: What’s the Difference?
Both FICO® and VantageScore credit scores can provide an accurate view of a person’s credit borrowing habits based on their calculated credit data. However, there are a few differences that every credit holder should be aware of.
A VantageScore credit score can be established in as soon as a month, while a FICO® score requires at least three to six months of credit activity to produce a credit score. VantageScore also allows people that would normally be excluded from most FICO® models to build credit through on-time payments towards their monthly bills.
Late payments can negatively impact your VantageScore credit score much more than a FICO® credit score since they weigh that factor differently.
Are There Lenders That Use VantageScore?
According to a recent study conducted by Oliver Wyman, the VantageScore model accounted for roughly 12.3 billion credit scores used between July 2018 and June 2019, proving that it’s a popular credit scoring model. That being said, credit card companies, personal loan providers, and landlords may use VantageScore to better understand the way you handle your finances rather than simply checking your credit score.
Remember that lenders and landlords all vary in which credit scores they refer to, so it may be best to ask them if your VantageScore credit score will be looked at during the approval process or if they prefer using a different model instead.
Build Your VantageScore With CreditBoost
If you’re looking to build your credit health right away, you can begin contributing your on-time rent payments to your VantageScore credit score with the help of CreditBoost.
Create an account to send an invitation to your landlord to join Avail today. Already have an account? Log into your account to turn on the CreditBoost feature the next time you make a payment and start working towards a better financial future.
*CreditBoost results may vary by individual.
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When focusing on maintaining or improving your credit score, you will likely hear about your FICO Score 9. This credit scoring model looks at your medical debt, paid collections, and rental history differently than previous versions of the FICO® credit-scoring model. More credit lenders are switching from the former FICO 8 scoring method to FICO 9 to better understand a person’s money habits, but you may be wondering why this change matters to you.
In this article, we explain everything you need to know about FICO Score 9 and share four easy ways to improve your credit score.
What Is a FICO Score 9?
A FICO Score 9 is the second-latest version of the FICO® credit-scoring model that officially launched in 2014 with some slight differences from the previous version, FICO 8. There have been numerous revisions of the credit scoring model over the past three decades to keep up with changing credit-borrowing trends.
The main function of your FICO Score 9 credit score is to inform lenders and landlords of your reliability as a borrower and your ability to make on-time payments. When compared to previous versions of the credit scoring model, FICO Score 9 treats medical debt, collection accounts, and rental history differently to allow credit lenders to better determine a person’s creditworthiness.
How the FICO 9 Is Different From FICO 8
The new credit scoring model approaches three categories differently than FICO Score 8. Here are the changes to be aware of:
- Medical debt: FICO Score 9 doesn’t consider medical debt as much as FICO Score 8 since medical bills are not a strong indicator of credit risk compared to other types of unpaid bills.
- Collection accounts: Collection accounts that have been paid in full are no longer taken into consideration when calculating a person’s credit score. Existing medical debt will have less of a negative impact on FICO Score 9.
- Rent payments: Rental history can be factored in a FICO Score 9 to help those with little to no credit history establish credit without a credit card. Although landlords are not legally required to report a renter’s rent payments to a credit bureau in most states, you can request them to start or do it yourself through tools like CreditBoost.
If you currently have little to no credit, the FICO Score 9 can be a great way to start building it through rent and utility payments, a credit builder loan, and more.
When Do Lenders Use the FICO Score 9?
Many lenders are beginning to move away from the FICO Score 8 to FICO Score 9 for a more updated and predictive FICO® score evaluation that improves their assessment process. However, each lender varies in which credit score they refer to during the approval process, which is why you’ll want to ask your specific lender if they will be looking into your FICO Score 9 at all.
4 Ways to Improve Your FICO Score 9 Credit Score
Improving your credit score is easier than you think. We’ve outlined four ways to improve your credit score in no time.
- Pay bills on time: Payment history is typically the biggest factor in your current credit score. The more on-time payments you make towards your monthly bills, the easier it will be to increase your credit score.
- Report your rent payments: Now that renters are allowed to report rent payments to credit-evaluating systems like FICO Score 9, using a tool like CreditBoost* can help you easily build credit without a credit card. All you need to do is invite your landlord to Avail to create an account and set you up to start reporting your rent payments.
- Use less credit: If you’re making on-time payments but still continue to see a decrease in your credit score, then it may be due to credit utilization. According to Experian, one of the three main credit bureaus, it’s advised to have a credit utilization rate below 30%. The less available credit you use, the better.
- Check your credit score: Regularly check your credit score to keep tabs on how you’re doing from a credit standpoint. It will help to identify the biggest contributing factor to your current score in order to make spending changes that will improve your credit.
How Do I Find Out My FICO 9 Credit Score?
Based on information from your credit report, you’ll receive a score between 300 to 850 that will indicate your creditworthiness. The Consumer Financial Protection Bureau makes it easy for anyone to access their credit score through their credit card company or any other provider that has opened up a new line of credit. While there are some methods to check your credit score that are free, you may need to pay a small fee to get your actual FICO® scores.
You can also explore sites like myfico.com to use their free FICO® scores estimator to get a projected credit score or obtain your actual credit score for a monthly fee of $19.95.
Improve Your Credit Score With CreditBoost
FICO Score 9 makes it easier to improve your credit score by minimizing the effect of medical debt, allowing you to report on-time rent payments, and excluding fully paid collections debt. But it’s still important to practice good credit habits to avoid decreasing your credit score.
Invite your landlord to Avail today to start reporting your past and future rent payments to TransUnion to contribute to your FICO 9, FICO XD, and VantageScore credit scores. All you have to do is create an account, send an invitation to your landlord to join, and we’ll take care of the rest.
*CreditBoost results may vary by individual.
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A good credit score is essential to accomplishing huge milestones like getting a mortgage loan or purchasing a new vehicle. But if you’re finding it hard to get approved by credit lenders because you have little to no credit, then you may be wondering what options you have to establish yourself as a reliable credit borrower.
We outline the four easiest ways to build credit without a credit card and explain how long it takes to establish a credit score.
4 Ways to Build Credit Without a Credit Card
Traditional forms of credit are no longer the only way to build credit. Here are four ways you can build credit without a credit card:
1. Rent Payments
Thanks to rent reporting platforms, renters can now improve their credit health by reporting on-time rent payments to one of the three main credit bureaus. You can either have your landlord report your payments each month or do it yourself by using a tool like CreditBoost* for $3.95 per month reported.
CreditBoost allows renters to report on-time rent payments directly to TransUnion, contributing to your FICO XD, FICO 9, and VantageScore credit scores. Although rent payments can’t go towards your main FICO® credit score (which doesn’t consider rent payments), reporting rent is still a great way to establish good credit through other well-known credit scores, like FICO XD and VantageScore.
A new tradeline of up to two years can be added to your TransUnion credit report, which helps prove to future landlords or credit lenders that you’re a reliable credit borrower. You can also potentially improve your credit score as you continue to report your on-time rent payments.
Invite your landlord to Avail to start reporting your previous and future rent payments through CreditBoost. All you have to do is create an account and send them an invitation to join.
2. Utility Bills
Similar to reporting on-time rent payments, your utility bills can also be reported to a credit bureau through platforms like Experian Boost to improve your credit. This platform helps renters with little to no history build their credit by reporting the payments they make towards their utilities, phone bill, and streaming services directly to Experian.
Pro tip: Combine CreditBoost and Experian Boost
3. A Credit Builder Loan
Credit builder loans are designed to help you build credit without requiring an existing credit score to get approved. However, you do need to have a sufficient income to cover these payments and this service cannot help those with existing debt.
When you get approved for a credit builder loan, a set amount of money is held in a bank account while you make payments. The money you pay towards the loan cannot be accessed until you’ve paid off the full amount.
The payments you make towards a credit builder loan are then reported to a major credit bureau to help you establish a history of on-time payments. Once you’ve paid off the loan, you then get the money back to put towards a down payment, in a savings fund, or spend it however you desire.
4. Become an Authorized User
If either a friend or family member is willing to add you as an authorized user on their credit card, then this can be a great way to have a reliable person’s payment history contribute to your credit score. In order to become an authorized user, you would need to be added to the account so you can benefit from the added credit without having to use the card itself.
However, not all card issuers report authorized users to a credit bureau, so you’ll want to confirm this as an option before moving forward.
How Can I Build My Credit If I Can’t Get Approved for Anything?
It’s now a lot easier to build your credit without having to get approved for a credit card or a personal loan. Try exploring credit-builder loans, becoming an authorized user, or reporting your rent payments through tools like CreditBoost as alternative ways to focus on your credit health.
While it will still take some time to establish a history of being a reliable borrower, it’s a worthy endeavor to establish a decent credit score that you can present to future landlords and credit lenders.
How Long Does It Take to Build Credit?
According to Experian, you’ll need at least three to six months of regular activity on your credit report for your credit score to be properly calculated. On the other hand, a VantageScore credit score can be established within one to two months of having a credit line.
If you’re looking to establish a line of credit sooner rather than later, it may be best to start reporting your rent and utility bill payments as soon as possible. These types of payments can build up your VantageScore in as little as 30 days, making it easier to establish credit quickly.
Build Your Credit Health With CreditBoost
With the help of on-time payments and new methods to build credit without a credit card, you can begin working towards a better financial future. Whether you decide to take out a credit builder loan or begin reporting your rent payments to a credit bureau, establishing good credit can be done in no time with the right tools.
Create an account or log in to invite your landlord to allow you to start reporting your rent payments right away.
*CreditBoost results may vary by individual.
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While there are traditional ways to build your credit, certain monthly bills can also positively or negatively affect your credit score. Figuring out what bills help build credit may not be easy at first, which is why we did the heavy lifting for you to make improving your credit health that much easier.
These are the bills you can leverage to boost your credit score today, as well as the importance of on-time payments and your payment history.
What Bills Help Build Credit?
Not all of your monthly bills can be reported to credit bureaus, but you may be surprised at exactly which ones have the power to help your credit score. Here are the main six bills to be aware of when building up your credit score.
1. Rent Payments
Before property management platforms, renters were unable to report rent payments to credit bureaus to build their credit health. Now that more landlords are utilizing platforms like Avail to make renting easier, renters are able to pay rent online and report on-time payments through CreditBoost* for $3.95 per reported month.
CreditBoost can be extremely beneficial for those with little to no credit, since Avail automatically reports on-time rent payments to TransUnion to contribute to your FICO XD score — an alternative credit score that looks at how you handle utility payments to determine your creditworthiness.
This tool also reports to your VantageScore and FICO 9 credit scores, which are often used by various lenders and landlords to gauge your reliability towards payments.
Invite your landlord to Avail to create an account so you can start reporting rent right away.
2. Utility Bills
Utility companies don’t report payments to credit bureaus unless an account goes into collections or is considered delinquent. But if you’re looking to improve your credit health without opening up a new line of credit, then it may be worth exploring a platform that allows you to report your utilities, phone bill, and popular streaming services for free — like Experian Boost.
CreditBoost and Experian Boost together can jumpstart your journey to a higher credit score by reporting payments automatically to both TransUnion and Experian.
3. Auto Loan Payments
Auto loans can either positively or negatively affect your credit score depending on your payment history. This type of loan consists of a set amount of installments that need to be paid during a certain timeframe, so even one late or missed payment can harm your credit score.
Know that your auto loan payments are automatically reported to credit bureaus each month, so it’s always advised to make your payments on time when trying to preserve and build your credit health.
4. Student Loan Payments
Considering 43.2 million students have an average debt of $37,787 in student loans, it’s important to know the impact this loan can have on your credit score. Whether you have public or private loans, both types need to be handled carefully to avoid negative remarks on your credit report.
Almost all student loan providers keep a track record of the payments you make (and miss), so while you can default on your loans, it’s advised to make as many on-time payments as possible. If you’re in need of some financial flexibility, you can also contact your loan provider to explore your payment options.
5. Credit Card Payments
There are both good and bad ways credit cards can affect your credit score. Applying for a new line of credit alone is considered a “hard inquiry,” which can decrease your score by a few points. Overspending on your card can also harm your score, as it shows you’re at risk for not being able to pay it all off.
However, having a lower credit utilization rate — meaning that you’re using a small portion of your card’s available credit — can boost your credit score over time.
It’s important to note that even missing one credit card payment can substantially decrease your credit score within 30 days. Credit cards offer great benefits, but they should always be used responsibility to avoid decreasing your credit score drastically.
6. Medical Bills
It’s easy to assume medical bills will not impact your credit score since most healthcare providers don’t report payments to credit bureaus. But if you have any outstanding medical debt that recently went to collections, your healthcare provider will likely sell your debt to a collection agency.
This will not only impact your credit score in the short term, but it will continue to live on your credit report for up to seven years from the original delinquency date. The good news is that this type of debt can be removed from your credit report, though it will take a few weeks to complete.
This is why you should always negotiate your bill or start a payment plan with your medical provider if you suddenly have a medical bill you can’t afford.
How Important Is My Payment History?
Your payment history is the most important factor credit lenders and landlords look at on your credit report. Failing to make any kind of payments can mark you as unreliable and make it harder to get approved for new lines of credit or a new apartment.
For more context on the importance of payment history, let’s look at the FICO® scoring criteria. Your credit score is based on the following factors:
- Payment history (35%)
- Credit utilization (30%)
- Account age (15%)
- Inquiries/new accounts (10%)
- Credit mix (10%)
VantageScore, a credit scoring model created by the three major credit reporting agencies as an alternative to FICO®, looks at slightly different criteria. Your credit score will still be determined by the following unweighted factors:
- Payment history
- Age and type of credit
- Credit utilization
- Size of balances
- Inquiries/new accounts
- Amount of available credit
Whether you’re looking at your FICO® or VantageScore credit scores, payment history plays the biggest role in determining your reliability as a borrower. The more on-time payments you make towards your bills can help you avoid a questionable payment history, and even boost your credit score.
Report Rent Payments With Avail
Now that you know what bills affect your credit score, the next step is creating a plan to improve your credit. As a renter, your largest monthly payment is probably your rent, so why not report it to a credit bureau?
Create an account or log in today to invite your landlord and start reporting your on-time rent payments through CreditBoost. Once your landlord sets up your account, you can begin contributing to your FICO 9, FICO XD, and VantageScore credit score all in one place.
*CreditBoost results may vary by individual.
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Effective July 1, 2021, California Governor Gavin Newsom will require large property landlords of subsidized multifamily housing units to offer renters the chance to report their on-time rent payments to major credit bureaus at a low cost.
Senate Bill 1157 is the first bill in the nation that works to help low-income families build their credit without having to open a new credit card or take on a loan. Here’s what the California rental law means for the state’s renters and landlords, as well as how renters can get credit for renting in California.
What Is California Rental Law SB 1157?
SB 1157 was created with the objective of providing renters with limited income the opportunity to improve and build their credit history by reporting their rent payments. By reporting on-time rent payments to the major credit bureaus, renters can improve their credit score without opening a new line of credit or taking out a loan.
According to the “Power of Rent Reporting Pilot” by the Credit Builders Alliance, 80% of renters that participated in the rent-reporting pilot program boosted their credit score by an average of 23 points through reported rent payments, which is the objective of SB 1157.
The law will last until July 1, 2025, and allow landlords to report FICO 9, FICO 10, and VantageScore 3.0 and 4.0 credit scores.
What Does California Rental Law SB 1157 Mean for Landlords?
SB 1157 will require landlords of assisted housing developments — defined as those that have low- to medium-income tenants that use a financial assistance program to reduce the cost of housing — with more than 15 units to give every new and existing renter the option to report their rent payments to a consumer reporting agency.
However, landlords with less than 15 units are exempt from this bill unless they:
- Own more than one assisted housing development, regardless of the number of units in each property.
- Are one of the following: a real estate investment trust as defined by Section 856 of U.S. Code, a corporation, or an LLC with at least one corporate member.
If a renter opts into rent reporting, they will be required to pay the landlord the lesser of either $10 per month for the report or the actual cost to report the rent payment. In order to opt into the credit rent reporting service, the renter will need to provide and sign a written statement of consent.
Customize and update your online lease agreements to include your rent reporting clause.
The landlord will also be required to disclose which consumer reporting agency the rent payments will be logged with. Landlords will receive instructions as to how to submit rent payments to credit bureaus in the mail in order to minimize confusion.
What Does California Rental Law SB 1157 Mean for Renters?
The California housing law will provide renters with the chance to improve their credit health through their rent payments. Renters participating in this program will need to provide a written request to their landlord in order to start the credit reporting process and be responsible for the credit reporting cost as outlined above.
That being said, the bill won’t infringe on any of the renter’s state and federal rights, such as a renter’s right to make withholding or deductions to their rent as outlined in Sections 1941 and 1942, which cannot be reported as a late payment to a credit bureau.
It’s important for renters to know that late or missed rent payments that get reported to a credit bureau can negatively impact a credit score, and in some cases, new tradelines on a person’s credit history can cause a temporary decrease in credit score.
Can Renters Stop Reporting Their Rent?
If a renter wants to stop reporting their rent, they will need to provide their landlord with a written request to stop reporting their rent payments. Once the renter stops participating in the service, they will not be able to restart the reporting process for at least six months, as outlined in the SB 1157 bill.
If the renter fails to pay the rent reporting fee to their landlord, the landlord cannot:
- Use it as a reason to end the tenancy
- Have the unpaid fee deducted from the renter’s security deposit
If the fee is still not paid after 30 days, the landlord can stop reporting the renter’s payments. The renter will then be able to sign up for the service again after at least six months.
Report Rent Payments With Avail
If you’re a landlord or renter looking for a simple way to report rent payments under SB 1157, CreditBoost by Avail allows renters the opportunity to report past and ongoing rent payments to contribute to their FICO 9, FICO XD, or VantageScore credit scores. There is no cost to landlords for a renter to report their payments through CreditBoost, and a renter can opt to turn off CreditBoost at any time.
Learn more about how paying rent can help build credit.
Landlords can also easily collect rent from more than one rental property all online, hassle-free. Create an account today or log in to get started.
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Your credit score means everything, especially to mortgage lenders. If you’re a first-time homebuyer, any lender will want to make sure that you’re a trustworthy candidate who makes your payments on time and has the financial resources to continue doing so — and a credit score will show that.
In the best circumstances, your credit score will prove to mortgage lenders that you’re a safe and reliable investment, which is exactly what they’re looking for. But what if you don’t have the best credit score?
What Credit Score Is Needed To Buy a House?
The minimum credit score needed to buy a house will differ for each lending agency. Depending on your credit score, they will also have different interest rates and loan requirements.
Overall, the better the credit score, the better your loan agreement and interest rates will be. Here are how minimum credit scores differ across various loan types.
1. Conventional Loan
The minimum credit required for conventional loans is around 620, though some lenders ask it to be in the mid-600s. According to Credit Karma, the average credit score for first-time homebuyers as of 2020 is 717, which aligns with the minimum requirements of many mortgage lenders.
2. Federal Housing Administration Loan
For a government-backed Federal Housing Administration (FHA) mortgage loan, the applicant must have at least a credit score of 500. If you have a 500 credit score, the FHA will require the lender to purchase private mortgage insurance (PMI) and pay at least 10% as a down payment. Otherwise, the lender can put as little as 3.5% down as long as they have a credit score of 580 or more.
3. Veteran’s Affair Loan
There is no minimum credit score requirement for a Veteran’s Affair (VA) mortgage loan, though these lenders are usually interested in a score of 640 or more. These loans do not require a certain amount as a down payment, and they will be issued by a private lender and partially backed by the U.S. Department of Veterans Affairs.
4. U.S. Department of Agriculture Loan
The minimum credit score requirement for U.S. Department of Agriculture (USDA) loan applicants is 640. These loans are backed by the U.S. Department of Agriculture and are provided to low- to average-income homebuyers purchasing in rural areas as part of the Rural Development Guaranteed Housing Loan program. These loans do not require a down payment.
If you want to see what mortgages would be available to you, you can calculate your mortgage lending options based on Realtor.com®.
How to Improve Your Credit Score to Buy a House
There are always actions you can take to improve your credit score so you are eligible for the mortgage loan you feel most comfortable with. Here are a few ways that you can do this quickly when looking to buy a home for the first time.
1. Address Credit Report Errors
Be sure to address any errors on your credit reports, such as an incorrect credit limit, payment dates, late payments that were actually made on time, or open accounts that are reported as closed. All of these mistakes can harm your credit and should be a quick fix before applying for a mortgage.
2. Pay Off Your Debt and Keep Your Balance Low
Your credit score will increase as you pay off some of your debt. While that can be a time-consuming process, regular debt payments and larger debt payments will help raise your credit while proving that you will be a responsible borrower.
You should also keep your credit card balance as low as possible in order to make timely payments and thus boost your score. Financial experts advise that those looking to improve their credit score limit the balance to 30% of the card’s limit each pay period.
3. Become an Authorized User on Someone Else’s Card
Another way to quickly increase your credit score is to become an authorized user on someone else’s card. This would result in the primary cardholder being responsible for paying off the card each pay period rather than the authorized user, though both users’ credit scores will be impacted by the card. In other words, if the primary cardholder has good credit and maintains that credit, the authorized user will also accrue good credit.
4. Start a Credit-Builder Loan
Finally, you can start a credit-builder loan in order to improve your credit score. These loans resemble a savings account that you contribute to through monthly payments. Those payments are then reported to credit bureaus to show that you are responsible enough and able to maintain a monthly pay schedule, thus growing your credit score. In the end, you have a higher score and a savings account with all the money you sent as “payments” to the lender.
5. Use CreditBoost
Renting can help you improve your credit through tools like the CreditBoost feature on Avail*. As a tenant, you can help build your FICO 9, FICO XD, and VantageScore credit scores by reporting rent payments made on time each month through your tenant account. You can also set up Autopay through your Avail account so you never miss a month’s rent payment again.
Report Rent Payments With Avail
While these are five ways to improve your credit fast to buy a house, be prepared for it to take some time before your credit score improves. If you’re renting and your landlord uses Avail, you can improve your credit score with on-time rent payments using CreditBoost*. Learn more about how to build your credit score with each on-time rent payment.
Get more information on improving your credit, finding a mortgage lender, working with a realtor, and more with our First-Time Homebuying Resource page.
*CreditBoost results may vary by individual.
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Rent is probably your biggest expense each month. But are you getting anything in return for making those sizable payments on time? Most people aren’t, and many renters don’t even realize they could help improve their credit by knowing how to report rent payments to credit bureaus.
NerdWallet reported that less than 1% of credit files contain any rental information, even though all three major credit bureaus (Equifax, Experian, and TransUnion) include rent payment information when they receive it.
Renters can benefit from reporting their on-time rent payments — especially renters who need some help boosting their credit score or developing a credit history — and there are a few ways it can be done.
How to Get Credit for the Rent You Pay
It’s important to keep in mind that the two major credit scoring companies (FICO and VantageScore) handle rent payment information differently.
The FICO Score, which is commonly used, doesn’t calculate rental payment information into scoring. But the newer versions of the report (both the FICO 9 and FICO XD) do take rental payments into account. VantageScore also incorporates rental payment information into their credit scoring.
Because renters can’t report their rent payments themselves, they’ll need their landlord or a third-party reporting service to report the payments for them.
1. Use a Rent Reporting Platform
Renters can sign up to have their rent payments reported through a third-party reporting platform. Because rent reporting usually benefits a renter the most, it can make sense to use a platform where renters are the ones responsible for signing up and paying any associated fees.
Platforms like CreditBoost report rent payments on a monthly basis to TransUnion, and renters can choose to report their past rent payments and/or current payments to the bureau. An added bonus for renters is that only on-time payments are reported, so their score won’t necessarily be hurt if they slip up and submit a late payment.
2. Have Your Landlord Report Your Rent Payments
Your landlord is another source for reporting your rent payments. Companies like TransUnion accept rent payment information directly from landlords, but your landlord will need to sign up for one of the services and pay the associated fees.
Some landlords will be inclined to skip the extra effort of signing up for a reporting service, but reporting rent to a credit bureau actually helps encourage renters to pay their rent on time, since falling behind on multiple payments can lead to negative reporting and a decreased credit score.
3. Pay Rent With Your Credit Card
Outside of directly reporting rent payments to a credit bureau, some renters overlook simple payment options that can help them improve their credit score — like paying rent with a credit card.
Online rent payment platforms like Avail allow renters to pay their rent with a credit card, which can help strengthen credit and, in some cases, help renters get reward points or cash back on rent payments.
While these payments won’t be listed as a separate tradeline on a credit report, they can still help boost a renter’s credit score if they’re consistently paying off full balances as they would a regular rent payment.
Which Property Management Software Platforms Report Rent Payments?
Over the past few years, property management software platforms have started providing landlords and renters the opportunity to report on-time rent payments to a credit bureau. As some states begin requiring landlords to allow renters to report rent payments, it’s always a good idea to see if your landlord is already utilizing landlord software that can help you report your rent.
There are a few property management software platforms that offer rent reporting capabilities, but they may require your landlord to pay a fee or can only help with a small handful of tasks. With Avail, renters can report their monthly rent with CreditBoost for a low fee, and landlords can easily collect rent payments and manage various properties in one place for free.
How to Start Reporting Your Rent Payments
Chat with your landlord to find out if they have a system in place for reporting rent payments. Some landlords might already offer the option to report rent to the credit bureaus and help you improve your credit.
If they don’t, you can sign up for a third-party reporting platform like CreditBoost and invite your landlord to collect rent online. Avail lets renters pay their rent with a bank account, debit card, or credit card, and once enabled, CreditBoost will automatically report all on-time rent payments that are made through Avail.
Find out more about paying rent through Avail and how reporting rent payments with CreditBoost can help build your credit*.
*CreditBoost results may vary by individual.
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There’s no shortage of advice on how to improve your credit score, but it often involves drastic actions, like getting a new credit card or taking out a loan. Because of this, many renters want to know if their rent payments can help build credit — and the answer is yes.
However, there are certain tools you’ll need to use to report current and past rent payments to a credit bureau like TransUnion. In this article, we’ll explain how to start reporting your on-time rent payments to build credit and ways to improve your credit score as a renter.
How Do Rent Payments Appear on My Credit Report?
Rent payments are considered alternative credit data, which are non-traditional forms of credit that can determine your creditworthiness. Although these payments won’t show up on your main FICO® credit score, this is a great way to build credit if you currently have little to none on your report.
Popular scoring models — FICO 9, FICO XD, and VantageScore — consider rent payments and other utilities when determining whether or not someone is a reliable borrower. In order to contribute to those credit scores, you’ll need to utilize a rent reporting platform to start building your credit health as a renter.
How to Report Rent Payments to the Credit Bureaus
Reporting your rent payments to a credit bureau is fairly simple. You can either have your landlord manually report your rent for you, or you can do it yourself using a rent reporting platform like CreditBoost*. Most renters prefer to report their rent payments to a credit bureau themselves since they have more control over the process. But it’s important to note that your landlord will need to set up an account in order for you to take advantage of this tool.
CreditBoost helps you contribute to your FICO 9, FICO XD, and VantageScore by reporting your on-time rent payments. Your payments go directly to TransUnion, one of the three major credit bureaus, to make it easier to build your credit health.
Here’s how to start reporting your on-time rent using CreditBoost: :
- Create an account for free: You can easily invite your landlord to join Avail and report your rent payments once you’ve been set up.
- Set up online rent payments: Paying your rent with Avail allows you to make payments using a debit card, credit card, or checking account.
- Turn on CreditBoost: Once you’ve set up your preferred payment method, you’ll need to switch on CreditBoost to start reporting your on-time payments. For a fee of $3.95/per reported month, you can start contributing to various credit scores in one place.
Create an account or log in to your tenant dashboard today to get the process started.
How to Get Credit for The Rent You Pay
There are two ways to build your credit with CreditBoost — you can report your ongoing rent payments and/or your past on-time rent payments. Both options have the potential to build your credit health without having to open a new line of credit.
- Ongoing rent payment reporting: Report the rent you’re currently paying to potentially see a steady improvement in credit and establish proof of long-term financial trustworthiness.
- Past payment reporting: Increase your credit score by reporting your past on-time rent payments from up to two years back. This can be helpful if you have little to no credit and need to build up your credit history.
How Much Will CreditBoost Impact My Credit Score?
A renter’s credit score can potentially increase by up to 40 points based on the average credit score increases previous users have seen over 24 months. However, renters need to consistently make on-time rent payments to see a similar result on their credit report.
Adding a new tradeline may temporarily result in a small decrease in your credit score, but this can bump back up with a strong payment history. The new tradeline from Avail decreases the average age of your accounts that are reported, so while this service can build your credit health, it’s important to approach this similarly to opening a new credit card. As you continue to report rent payments, the score can improve (considering other factors remain the same).
What If I Don’t Currently Pay Rent Online?
Create a free Avail account and invite your landlord to Avail to start accepting rent payments online so that you can start building credit with rent. Online rent payments offer plenty of incentives for landlords, including quick direct deposit, automated rent receipts, and easy tracking and reporting for tax time.
The Benefits of Having a Good Credit Score
Having a credit score higher than 629 can make it easier to qualify for lower interest rates on different types of loans, a mortgage, and credit cards. Plus, you’ll have an easier time getting approved for an apartment down the line.
Exploring various ways to build your credit can make it easier to not only improve a low credit score, but get as much value as possible from all of your monthly bills. In the past, only homeowners were able to build credit through their monthly mortgage payments, but the same is now possible for renters to prove their credit worthiness.
Having a good credit score affects many areas of life, from necessities like housing and transportation to opportunities for leisure and travel. The quicker you begin reporting your on-time rent payments to a credit bureau like TransUnion, the easier it’ll be to have a stellar credit history.
Start Building Your Credit Score With CreditBoost
Paying rent can build your credit health, as long as you have the right tools to report your payments. Whether you prefer to have your landlord report your payments or would like to do it yourself, you can easily start utilizing CreditBoost once your account has been set up.
Create an account or log in today to start working towards a stronger credit score today.
*Credit scores impacted include FICO 9, FICO XD, and VantageScore. Results may vary by individual.
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