If you don't pay your credit card bill, car loan, or mortgage, the creditor will report the delinquency to the three major credit reporting bureaus: Equifax, Experian, and TransUnion. Then, an adverse notation will appear on your credit reports, and your credit scores will go down. (The information in your credit reports affects your credit scores. When your reports show negative events, your scores fall.)
On the other hand, rent payments usually won't affect your main credit reports or credit scores because they don't get reported. But some national specialty credit reporting agencies gather and report rental histories. And all three major credit bureaus will include rent payment information in their reports if they happen to receive it, like from a debt collector your landlord hires to collect unpaid rent.
So, if you can't pay rent, working out a temporary arrangement to make reduced or no payments is a good idea.
Again, unpaid rent probably won't show up in the credit reports Equifax, Experian, and TransUnion produce. That's because unpaid rent isn't usually directly reported to these credit bureaus—especially if you rent from a landlord with few units or properties. Because a landlord would need to become a member with the bureaus and have a minimum number of active accounts to report unpaid rent, only high-volume landlords typically report overdue rental payments.
Because unpaid rent usually isn't reported, it probably won't affect your credit scores. But if you regularly pay your rent on time and want it to help your credit, you might consider signing up for a rent-reporting service (see "Can I Put Rent on My Credit Report?" below). People usually join these services to improve their credit scores by ensuring that rent payments are included in their credit history.
Specialty credit reporting agencies gather and report only particular types of information on consumers, such as tenant histories, check writing histories, employment histories, and insurance claims. These agencies, similar to the main bureaus, collect information about consumers from a variety of sources, compile reports, and sell them to businesses.
So, if you rent from a landlord with just one or only a few properties and haven't signed up for any rent-reporting options, the three main credit reporting bureaus (again, Equifax, Experian, and TransUnion) probably won't find out if you miss some rent payments. But the delinquency might affect a specialty credit report.
If you're applying as a tenant for a residential property, the landlord or management company might use a specialty reporting company (a tenant screening company) to screen you.
This kind of report could list your previous addresses, rental payment history, evictions, and other information obtained from previous landlords and court records. A specialty tenant screening report that contains negative information about you might result in a future rejection of a lease application. Or you might get approved, but you'll have to pay more or comply with additional lease conditions, like paying rent in advance.
Managers of multi-unit buildings are more likely to request a tenant history report than the landlord of a single-family home or a landlord with just a few units.
You can check your specialty reports to ensure the information the various agencies have about you is accurate. The Fair Credit Reporting Act gives you the right to get free copies of specialty consumer reports once every 12 months.
See the Consumer Financial Protection Bureau's website for a list of most specialty credit reporting agencies, including tenant screening companies. There, you can find contact information for various Consumer Reporting Agencies.
Overdue rent might appear on your credit reports if the landlord sends the debt to a collection agency. The agency might report the collection account to the credit bureaus. Also, if an eviction appears in the public record, the credit reporting agencies will likely include it on your credit reports.
Your best bet to avoid damaging your credit is to negotiate an amendment to the terms of your lease or rental agreement, getting your landlord to agree to reduce or suspend your payments for a while.
If you rent from a large organization and need a rent reduction or suspension, inquire whether the company reports unpaid rent to the credit bureaus. If so, you can ask them not to report you as delinquent and, if they agree, even write it into the terms of the amendment.
If your rent currently isn't showing on your credit reports, but you make regular, on-time payments, you might want to add this information to your credit history by signing up with a rent-reporting service. (Generally, your landlord must sign up too.) Once you sign up for a rent-reporting service, the company provides information about your rent payments to one or more of the major credit bureaus.
However, the major credit reporting bureaus don't share information, so rent payments reported through some services won't necessarily appear on all three of your main credit reports.
Various rent-reporting services are available. Zego, for example, reports rent payments to Experian and TransUnion. With Zego, only positive, on-time rental payment data is submitted—missed payments aren't reported.
Turbotenant will automatically report your on-time rent payments to TransUnion if your landlord signs up for their services.
Fannie Mae has a program to help renters improve their credit when making timely rent payments. The landlord can enroll in the program if you live in a Fannie Mae-financed multifamily building.
The program connects the property owner with a financial technology (fintech) provider, and when you make on-time rent payments, the landlord then shares that data with the provider. The provider reports the positive rent payments to Equifax, TransUnion, and Experian. Only positive information gets reported. If you miss a payment, the property is removed from the program. So you won't suffer any harm to your credit.
If you sign up for Experian Boost, your rent payments could help improve your credit score. If you connect your bank, credit card, or another service provider to Boost, the service will look for a positive history of utility, telecommunications, and rent payments you can add to your Experian file.
But this service also has downsides, such as your personal information being potentially vulnerable to a data breach, and the service might not actually help your score. Also, when you apply for credit, like a car loan or credit card, that lender might not use the score that Boost affects when evaluating your creditworthiness.
Depending on the service you sign up for, rent-payment reporting can potentially help you if you have a not-so-good credit history, a thin credit file (not much credit history), or you're credit-invisible (you don't have a credit history). When your landlord or a rent reporting service reports your regular, on-time rent payments to the credit bureaus, your credit scores will increase.
If you need help preparing an amendment to your lease or rental agreement, Nolo's Every Tenant's Legal Guide provides an Amendment to Lease or Rental Agreement form. If you need further assistance, consider talking to a Landlord-Tenant attorney.