What if paying rent on time boosted your credit score?

Blog posted On October 19, 2018

For the growing number of Americans–around 43 million households–that rent their homes, nonpayment of monthly fees can lead to disastrous consequences, including eviction. Paying late can create bad blood with landlords over time. While those people who do pay rent on time are more likely to be able to remain in place, those renters see few other benefits. Unlike owning a home, which enables people to build wealth and benefit from tax deductions, renting often feels akin to dropping one’s paycheck through a sieve. And there’s another crucial difference between owning and renting a home: On-time mortgage payments are factored into individual credit scores, and rent payments are not.


A robust credit score is necessary for accessing essentials like bank loans, and useful for receiving discounts on anything from insurance plans to phone contracts to, ironically, credit cards themselves–a Catch-22 that keeps many people, especially low-income people of color and immigrants, locked out of this sector of the financial system. Around 45 million people in the U.S. currently lack a credit score, yet many of those people have a solid track record of meeting significant financial obligations in the form of on-time rent payments, which often constitute up to 35% of someone’s income.