NEW YORK (MainStreet) — Back in January, one of the major credit reporting agencies, Experian (Stock Quote: EXPE), announced it would begin including rental payments in its credit score formula.
In response to Experian’s decision, a cottage industry of websites has arisen to help consumers make the most of their rental payment from a credit score angle: Williampaid.com, for example, will not only pay your rent for you automatically (it deducts your payment from your bank account for a $1.75 monthly fee), it will also report your rental payment to FICO (Stock Quote: FICO), the main credit monitoring firm, for $2.50 per month.
There’s also a new website called RentReporters.com that opened its digital doors Monday. The site says it can verify residential rental payments of 100 million U.S. renters and transfer those payments to consumer credit reports, thus helping boost their credit scores.
RentReporters takes the rental-payment receipts straight from the landlord and delivers the payment data to credit bureaus for inclusion on consumer credit reports, charging $89.95 per year or $5.95 per month after a $39.95 setup fee.
“Having been where many of our customers are now, I know firsthand the economic circumstances that can result in a poor credit score,” says Crispin Luna IV, founder and president of RentReporters. “We allow essentially every renter in the U.S. to take one step closer to homeownership and leverage their rental payments towards a better credit profile.”
While it’s just Experian right now, RentReporters expects the two other credit-scoring titans to begin including rental payments shortly.
“The significance of the shift from debt-based credit and the impact it will have on the American credit market is huge,” Luna says. “There is no doubt that in the near future Equifax (Stock Quote: EFX) and TransUnion will soon announce the inclusion of rent on their traditional databases.”