Build Your Credit While Waiting for the Right Time to Buy

Published on Sep 10, 2014 06:25 am

There are a number of reasons why you might be waiting for the right time to buy your first home. But if it’s because you don’t have enough information to create a credit score yet, and you’re currently renting, there may be good news. A new study conducted by Experian RentBureau shows that, for some subsidized housing residents with positive lease payment behavior, having a good rental payment history positively impacted their credit scores, and can also potentially deliver access to more—and more affordable—credit. It can also help show enough credit activity for a score to be calculated for the first time, particularly if credit use has been limited or minimal in the past.

Establishing credit is one of the most important steps on the road to becoming a homebuyer. “Consumer financing…excluded many Americans from the opportunity to attain credit due to a limited or no credit history,” Genevieve Julliard, president of Experian Consumer Information Services shared, according to Realtor Mag. “Residents who pay their rent on time month after month should be rewarded and not overlooked simply because they rent instead of own the place they call home.”

The study found that nearly 75% of people sampled with already scorable credit files under the VantageScore 3.0 credit scoring model experienced a score increase as a result of the positive rent reporting now being included in their score calculation. Of those 75 %, the majority experienced a score increase of 11 or more points. In the past, only negative rent payment information came to the credit bureaus by way of accounts in collection, or as judgments on a public record, but Experian has added on-time rental payment to its scoring database, allowing both kinds of information to be included in the scoring calculation.

How might adding your positive rental payment information impact your score? If you’re renting while you wait to qualify for a mortgage, you may already be further down the road than you think. Check with your landlord to see if they’re reporting your good rental payment habits, and stay on top of changes to your credit behavior. You can learn more about credit scores and how they affect the big moments in your life through the information resources available at Experian.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

Published by permission from, Inc., an Experian company.   © 2014, Inc.  All rights reserved.

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