Experian, TransUnion start adding rent payment data to credit profiles

[unhappycamper]

http://www.latimes.com/business/realestate/la-fi-harney-20140810-story.html



Consumers who have made on-time rental payments had been frustrated that their histories didn’t count in credit scores. Above, a Berkeley property.

Experian, TransUnion start adding rent payment data to credit profiles
By Kenneth R. Harney
8.10.2014

Anybody buying a first home quickly learns how important credit scores are to mortgage lenders. They like them high.

But if you've been renting for years and have a stellar record of monthly payments to your landlord, you typically run into a sobering reality when you shop for a mortgage: All your on-time payments show up nowhere in your credit bureau files and do not contribute to your scores.

Ditto for other routine credit payments — your cellphone bills, cable and satellite TV, utilities. You may have perfect payment histories for all of these, but nobody knows about them.

Why? Because the landlord, phone and cable companies, and many other creditors don't report your payments to Equifax, Experian or TransUnion, the big three credit bureaus. In the all-voluntary American credit system, they are not required to report anything to anyone.

[yeoman6987]

1. This is good and bad news

Of course, those who pay every month are in good shape, but those who miss a payment could see their score drop pretty much. I have never rented so I don't know how important it really is to see a rental on the credit score. I always thought that having enough salary was better for the buyer. Although I guess the interest rate might be better with a higher credit score. Those getting a mortgage, please get a fixed rate. All those that got those variable rates really found out that was not a great idea. Sure a fixed interest rate might make the monthly payment higher but in the long run it works out really well. For example, you will pay the same amount 20 years after your purchased the home when that amount seems really small. Of course property taxes go up, but they will with a variable rate anyway.