As everyone knows a good credit score has a huge impact in today’s world, and can even determine your quality of life. The purpose of a credit score is for lenders to be able to predict the likelihood that you will make your payments. Lenders like to see that you can demonstrate the ability to make on time and regular payments. If you are paying a mortgage, your timely and regular payments will count positively toward improving your credit score. However, if you are a renter like many individuals, your payments do not normally count toward your credit score, even though it is most likely one of your biggest expenses month to month.
Rent in Chattanooga has increased year after year. According to rentcafe.com the average rent for an apartment in Chattanooga is $875, a 5% increase compared to the previous year. Even though Chattanooga’s average rent prices are not as exuberant as areas such as Los Angeles or New York City it still is a pretty large chunk of change. It is odd that such a large expense would not be considered in credit score allocations.
What’s Included in my Credit Score?
Not every transaction you make is reported to the credit bureaus. Here are some examples of what is reported:
- Public Records: Bankruptcies, foreclosures, lines, etc. are reported but they have a time limit. For example, a Bankruptcy is on your credit report for 10 years but then falls off after the time limit has expired.
- Utilities: While your utilities are not reported if you make your payments regularly and on time, they are reported if you start missing payments and that bill is reported to a collection agency.
- Loans, Credit Cards, Mortgages. These are all reported to the credit bureaus.
FICO Score Run Down
First let’s recap what exactly a FICO score or credit score consists of. A FICO Score which is used by 90% of all U.S. financial institutions is assigned by three different credit bureaus: TransUnion, Equifax, and Experian. It is three digits that range from 300-850. Your FICO score is calculated based off of five factors.
- Payment History: 35%
- Amounts Owed: 30%
- Length of Credit History: 15%
- Types of Credit Used: 0%
- New Credit: 10%
How to Get my Rent Payments Included
For many renters, the possibility of their rent payments being counted toward their credit score could mean a substantial boost in credit scores as a whole. There are many apartments around the Chattanooga area that already offer online payment programs that report your payments to the credit bureau. If you live in a place that does not automatically report your payments then you can apply to credit reporting services that can. Many of these reporting services charge a monthly fee, and the qualifications and services vary. Reporting services such as CLearNow, ERentPayment, PayLease, and PayYourRent, RentTrack, and many more all allow you to count your rent payments toward your credit score.
If you are not sure if this would help your credit score or if you have any other questions regarding your credit score or money problems, a good consumer bankruptcy lawyer here in Chattanooga can help you. Contact us today for a free consultation and debt evaluation.