In a country where your credit history determines not only whether you can finance a car or buy a house, but also whether you can rent an apartment, open a cell phone account, or even land a job, finding ways to build or improve credit is more than a technical matter: it’s a matter of access and financial dignity.
And one of those methods — until recently overlooked — is gaining traction in the United States: using rent payments as a tool to raise your credit score.
A Simple Solution with Real Impact
If you’re like millions of Americans who pay rent every month, on time, you might be surprised to learn that these payments, even though they’re often your largest monthly expense, usually don’t count toward your credit score. That’s because, historically, rent hasn’t been considered a form of debt—unlike loans or credit cards.
But that’s changing. A study published this month by the Urban Institute, a Washington, D.C.–based think tank, analyzed two groups of renters recruited in 2021 and 2022. The study found that tenants whose rent payments were reported to credit agencies saw statistically significant increases in their scores—especially those with weak or nonexistent credit histories. In some cases, it was the first time these individuals were able to generate a credit score at all.
The key? Positive rent reporting, which includes only on-time payments and excludes any late or missed payments. In other words, for those who pay on time, it’s all upside.
How Does Rent Reporting Work?
The process is simple: specialized companies like Esusu and TurboTenant act as intermediaries between you (or your landlord) and the credit bureaus. They report that you’ve paid your rent on time, and it starts to reflect positively on your credit history.
You can sign up directly with these companies, or you might gain access through your landlord or a housing organization. In many cases, the service is free — especially when offered by nonprofit organizations. In others, it might cost around $5 to $10 per month.
And the best part: if you’re late one month, it doesn’t automatically hurt your score. Rather than reporting it as delinquent, the system simply leaves that month blank. An “X” appears for the account in that month on the credit report, and the information doesn’t factor into your score.
“An X means no information, rather than negative information,” said Maitri Johnson, head of the tenant and employment screening division at TransUnion, in an email. Lenders, she added, use their own judgment to interpret the report.
Data from TransUnion, similar to the new study, show that people with low or no scores benefit the most from rent reporting. “It makes a difference for the people who most need help and support,” Ms. Johnson said during a webinar hosted by the institute.
Why Does This Matter?
For millions of Americans — especially low-income families, young adults, immigrants, and those who’ve faced financial hardship — building credit is one of the biggest barriers to a better life.
Without a credit score, loan terms are worse, renting requires higher deposits, and even opening an internet account can be more difficult. By allowing rent payments to count toward credit history, the system begins to recognize a real, consistent effort made by these households.
Moreover, the study found another interesting effect: renters who started reporting rent began to reduce their total debt. According to the researchers, this might be linked to greater awareness of credit — an example of how financial education combined with technology can change lives.
Are There Any Risks?
Yes, and they need to be discussed responsibly. Organizations like the National Consumer Law Center warn that the danger lies in “full” reporting models, where late payments are also reported. For a family going through a tough month, a single late payment could damage not just the score, but also the chance to rent another home.
That’s why experts recommend positive, opt-in rent reporting, where tenants choose to participate and only on-time payments are considered. Many states are piloting programs with this model, and California has even passed laws requiring many landlords to offer rent reporting as a service.
Consumer advocates generally prefer opt-in programs, where tenants choose to enroll, rather than automatic enrollment with opt-out options, because opt-in models give tenants more control over how their personal data is used.
Still, automatic enrollment in opt-out models makes it easier to build and manage participation, said Ms. Duguay of the Credit Builders Alliance. (Auto-enrollment has become common for other financial products, like workplace retirement accounts.)
Ms. Morris, from Jubilee Housing, said the group initially offered rent reporting on an opt-in basis, but found that many tenants needed substantial support using unfamiliar digital tools. The group recently switched to a new provider, she said, that automatically enrolls tenants but allows them to opt out if they wish. “We’re trying to reduce access barriers,” she said.
Is It Worth It for Everyone?
If you already have an excellent credit score (above 700), the impact will be minimal. But if you’re just starting your financial life, recovering from difficulties, or trying to improve your access to credit, rent reporting can be a game changer.
With advancing technology and growing adoption by companies, we’re facing a historic opportunity to make the credit system fairer, more inclusive, and more reflective of the realities faced by most Americans.
