Zillow Launches Rent Reporting Service to Help Renters Build Credit

Zillow Launches Rent Reporting Service to Help Renters Build Credit

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  • Online real estate marketplace Zillow introduced its rent reporting service on January 17.
  • Zillow’s rent reporting is free for tenants who pay rent through Zillow.
  • Zillow’s rental reporting service reports payments to Experian, one of the three major credit bureaus.

Zillow offers a free rent reporting service to thousands of tenants who pay their rent through the real estate marketplace website. Starting January 17, they can choose to report their monthly rent payments to Experian, one of the three major credit bureaus.

Despite making up a large portion of monthly expenses, paying rent won’t affect your credit score because it doesn’t usually end up on your credit report. Rent reporting services allow tenants to build credit on one of their largest monthly expenses.

Check out Personal Finance Insider’s picks for the best rental reporting services

“Every on-time rent payment is a testament to a tenant’s reliability, yet it is often overlooked on credit reports and we want to change that,” said Michael Sherman, vice president of Zillow Rentals, said in a press release.

How does Zillow’s rent reporting work?

Tenants currently using Zillow to pay rent can choose to report rent through their Renter Payments Dashboard. New Zillow users will be asked if they want to opt out of rental reporting when they sign up to pay through the platform.

To pay rent through Zillow, your landlord must be enrolled and send you an invitation link. Using a bank transfer to pay rent through Zillow is free. Paying with a credit card has a 2.95% fee, and paying with a debit card costs $9.95 per transaction.

Once a tenant has chosen to report rent, Zillow will identify on-time rent payments – made within 30 days of the due date – and report them to Experian. Tenants can choose to report rent at any time.

Zillow does not report late rent payments, 30 days overdue. However, once your rent payment is more than 30 days late, your landlord, separate from Zillow, may report the payment as delinquent to the credit bureaus, which will lower your credit score. .

Is it worth reporting the rent?

Rent reporting services are an increasingly common method for consumers to improve their credit because it is a large monthly expense that typically does not contribute to your credit score.

Competition is fierce among the best rent reporting services, with many services offering features such as utilities reporting, up to 24 months of retroactive rent reporting, and tri-bureau rent reporting. Renters can take advantage of this competition, paying the lowest prices for comprehensive services.

As such, reporting rent involves a major disadvantage. Reported rent does not affect your credit score equally.

You have multiple credit scores from the FICO and VantageScore credit scoring algorithms. These credit scores serve different functions and as a result, are calculated differently. The credit scoring models FICO 9, FICO 10, VantageScore 3.0, and VantageScore 4.0 factor into your credit score calculations. However, FICO 8, one of the most widely used credit scores by lenders, does not factor rent into its calculations whether or not it appears on your credit report.

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