Why can rent payments effect your credit negatively, but not positively?

[trmiv]

I was just thinking about that. I've been paying rent on apartments for around three years now, never missed a payment, never been late. We're not talking small payments here, we're talking $875/mo on my first apt, then $975/mo on the next, and now I pay $1210/mo. That's a big chunk of change I shell out every month without fail, but it doesn't do anything positive for my credit. Now if I do miss a payment or I am consistently late, it has a negative effect on my credit, provided the landlord reports it. Why is that? I realize most rent is payed in advance for the next month, but you'd think something like that could be counted as a positive on your credit.

Is there a way to get it to reflect positively on your credit?

 

[mzkhadir]

I think because you are not building it into anything. You are not building credit in that property.

 

[her209]

Its like tax. If you don't pay, prepare to go FPMITA prison.

 

[Eli]

Originally posted by: her209
Its like tax. If you don't pay, prepare to go FPMITA prison.

Well, in the case of not paying rent.. just prepare to be kicked out into the streets. Heh.

 

[her209]

Originally posted by: Eli

Originally posted by: her209
Its like tax. If you don't pay, prepare to go FPMITA prison.

Well, in the case of not paying rent.. just prepare to be kicked out into the streets. Heh.

Where you will get sodomized by a homeless guy!

 

[trmiv]

I did find this one some real estate guy's site:

"Rent does not appear on your credit report. However, when you apply for a mortgage, the lender will request a verification of your rent payment history and consider it heavily in the decision to grant a loan. Therefore, paying rent on time is extremely important when applying for a home loan."

Is that true? If so, good to know I'll get something out of all these rent payments at least.

 

[drnickriviera]

Originally posted by: trmiv
I did find this one some real estate guy's site:

"Rent does not appear on your credit report. However, when you apply for a mortgage, the lender will request a verification of your rent payment history and consider it heavily in the decision to grant a loan. Therefore, paying rent on time is extremely important when applying for a home loan."

Is that true? If so, good to know I'll get something out of all these rent payments at least.

That is true. The mortgage company usually ask the landlord to fill out a little form.

What is the current rent
Ever been late
How long lived there

They may also ask for bank statements showing rent payments, so pay with a check, not cash.

 

[Rubycon]

Rent will show on a major credit report. It is up to the landlord to report late payments to the credit agencies, however.

The reason why it shows is so creditors can get an idea what you can afford when purchasing a car, for example. The same is true for alimony and child support. The more accurate this information, the easier it is to qualify a buyer to ensure they have the capacity to repay the loan. It has nothing to do with tendancies of WANTING to pay the loan. 🙂