How to Get a Free Credit Report
A step-by-step guide 🔍
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Does paying rent on time build credit? Yes, it can, but it doesn’t happen automatically
Here’s the short answer: yes, paying rent can build credit, according to financial bodies such as Chase bank.
But it won't happen automatically. You’ll need to sign up to a rent-reporting service, and this might cost a small fee.
Eligibility requirements apply.
If you have a low credit score or short credit history, using timely rent payments can be one of many ways to add to your credit score.
(Looking for further ways to build credit? You can work on your credit with bill payments too. Keep scrolling).
Before we explain how you can go about this, we’ll take a look at why paying your rent can build your credit score. So you can understand what the heck is going on with the numbers.
Experian, one of the big three credit bureaus, explains your credit score like this:
“A credit score reflects how reliable you are when it comes to repaying money. Your credit score is based on how you’ve handled money in the past. The higher your credit score, the better your chances of being accepted for credit, and at the best rates.”
Ok, makes sense. But the part that is relevant for you, is what factors are taken into account when building your credit score.
Once your credit history has been reported to the credit bureaus, it is generated into a credit score by companies such as FICO. FICO explains how this score is calculated:
So the largest factor is on-time payments. This means you can work on your credit score by ensuring that you always pay bills on time, and sometimes, by reporting your rent payment.
Unfortunately, while it is possible to report your rental payments, it isn’t always taken into account in your credit score. It depends on the credit-scoring company.
The good news is that paying rent is sometimes taken into account. And building credit is all about covering as many bases as you can to slowly work on your score.
Here’s how it works:
💙 The amount you add to your security deposit becomes your credit limit (there’s a minimum deposit of$1)
💙 You spend the money on the card, and with autopay, you repay it automatically
➡️ Add bills or subscriptions so you drop the life admin and spend automatically. Killing two birds with one stone. You can also set up bill reminders and factor these bills into your Cleo budget.
💙 Cleo reports your payments to credit bureaus and (if they’re on time) you start building credit
Did we mention there’s…
💙 No interest
💙 No credit checks
*The Credit Builder Card is issued by WebBank, Member FDIC pursuant to a license from Visa USA Inc. Access to the Card is subject to approval.
**“Cash/Salary Advance” and “Cashback Rewards” are features of the Cleo Builder Subscription and not the Credit Builder Card. The “CardCash Advance” is a feature unique to the Credit Builder Card and allows you to advance cash at an ATM. The Card Cash Advance is subject to a $2.50 fee per transaction plus any fee that may be charged by the ATM or Bank. This feature is only available to holders of the Credit Builder Card.
A step-by-step guide 🔍
All your FAQs about credit scores, starting with when credit scores were invented.
How long does building a credit score take? And how do you build your credit score fast? We’ve got you covered.