Rent: It’s one of the first items on your monthly budget, and paying rent is such an ingrained habit that you barely even have to think about it. If you’re not in the habit of paying rent online, though, you might consider starting. Why? Because paying your rent online can improve your credit score!

In 2017, TransUnion looked at 12,000 renters who reported their rent payments to credit bureaus over the course of a year. They found that renters’ scores rose an average of 16 points within six months, with the greatest benefit happening for those who started with a credit score below 620.

When you pay rent online, your payments are reported, it shows credit bureaus what they are looking for, and it can combine with credit card payments to increase your score even more. Here’s how it works.

Get Your Payments Reported

How does paying rent lead to improving your credit score? 

“Simply paying your rent will not help you build credit,” says Bev O’Shea at NerdWallet. “But reporting your rent payments can help you build credit—especially if you are new to credit or do not have a lot of experience using it.”

That’s one of the reasons we at Yorba Linda offer an online rental payment system that reports information to the credit bureaus. Credit bureaus receive a record of your on-time rental payments, and that improves your credit score.

Beef Up Your Payment History

When looking for ways to increase your credit score, it’s important to consider what actually goes into it. Here’s how Experian determines credit scores for an example:

  • Use of credit cards
  • Payment history
  • Applications for new loans and credit

When you pay rent online, those payments become part of your payment history, and that becomes part of your score. Easy!

Combine with Credit Card Payments for Higher Score Gains

Here’s a tip to consider: “Open a credit card and use it to pay your rent . . . then pay your credit card balance in full each month,” says LaToya Irby, credit expert for The Balance. “The timely credit card payments will help boost your credit score.”

Of course, you don’t need to pay your rent with a credit card instead of a debit card, but it can improve your credit score in combination with the benefits of paying your rent online.

Improve your credit score by paying rent through the resident portal. That way, your payments get reported to the credit bureaus, which makes you look good. And if you decide to get a credit card specifically for rental payments, you may just increase your score even more. Give it a try!