How to Build Up Credit

Are you among the 50 million consumers who have little or no credit history?

Do you meet regular payment obligations like paying rent and utilities but still have a “thin” credit file because these nontraditional sources do not show up on your credit reports?

Well there is good news on the horizon for renters because one of the major consumer credit reporting agencies (Experian) recently announced that it now adds rental data to credit reports which will affect the credit histories of millions of consumers.

Now don’t get too excited because not every renter will benefit because Experian is drawing its rental payment data from only 45 property management companies in the country which covers about 8 million residents.

But the important thing to take away from this is Experian is recognizing that rental payments play a significant role in determining your creditworthiness. Brannan Johnston of Experian said “Given that one third of the U.S. population rents, we felt it was imperative to reflect the true creditworthiness of those individuals who responsibly pay their rent.”

But what if you’re property management company is not one of the selected few?

How can you build up your credit report with your rental payments?

Well, until rental payment data becomes a standard trade line with the three major consumer credit agencies another option would be getting your rental payments reported to PRBC.

PRBC is a credit reporting agency that reports on “nontraditional” payment data like rent payments and utilities in order to show lenders that you pay your bills on time.

There are two options you have to accomplish this:

1. Your property management company must subscribe to PRBC and furnish your rental payment data to its database.
2. You can utilize an Account Now Prepaid Master Card and pay your bills using its Account Now Bill Pay. Each bill payment you make is reported to PRBC which results in building up your PRBC credit report.

Now that you know how your rent can build up your credit reports why not add your utilities, cable, and insurance payments too!

This can be especially beneficial in qualifying for a home loan because you can demonstrate that you’ve made consecutive on-time bill payments that include a housing payment (rent), and other bills such as electric, cable and phone.

Let’s hope that Equifax and Transunion will follow Experian’s approach and grow this underserved population of new creditworthy customers.

What are your thoughts?

Ready to build your personal and business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free audio seminar ($597 value) =>

About the author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness.com, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.