A good credit score helps you get lower interest rates and fees for borrowing money. Landlords may report late payments to credit bureaus, which can hurt your credit score. Landlords generally must subscribe to a credit agency's service before they can report late rental payments. They must meet strict federal standards and tough technology safeguards to qualify for a subscription. Therefore, small landlords are less likely to subscribe and report late payments than large landlords.
Some lenders require referrals and rental payment histories from landlords when you apply for credit. Therefore, even if late rental payments do not appear on your credit report, a bad recommendation, or poor payment track record, can hurt your chances of getting a mortgage. Also, court judgments typically show up on credit reports. So, if your landlord sues you for unpaid rent and receives a judgment against you, it can show up on your credit report and lower your credit score.
- Huffingtonpost.com: Slacking on Rent Payments Can Cost You More Than Late Fees
- Experian.com: Late Rental Payments Are Not Typically Reported By Landlords
- Federal Trade Commission. "Renting an Apartment? Be Prepared for a Background Check." Accessed May 18, 2020.
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- Experian. "Finally, Your Rent Payments Can Give Your Credit Scores a Boost." Accessed May 18, 2020.
- Fair Isaac Corporation. "Truth Squad: Can Scoring Rental Data Vastly Improve Credit Access?" Accessed May 18, 2020.
- Experian. "Does Breaking a Lease Affect Your Credit?" Accessed May 18, 2020.
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- Experian. "Can I Pay My Rent With a Credit Card?" Accessed May 18, 2020.
- Los Angeles County Consumer and Business Affairs. "Improving Your Credit Record." Accessed May 6, 2020.
- Experian. "How to Get an Apartment With Bad Credit." Accessed May 18, 2020.
- Progressive. "What to Know Before Cosigning a Lease." Accessed May 18, 2020.
- Quicken Loans. "How to Rent an Apartment With Bad Credit." Accessed May 18, 2020.
- Realtor.com®. "Having a Cosigner Can Help You Land a Rental." Accessed May 18, 2020.
Maggie Lourdes is a full-time attorney in southeast Michigan. She teaches law at Cleary University in Ann Arbor and online for National University in San Diego. Her writing has been featured in "Realtor Magazine," the N.Y. State Bar's "Health Law Journal," "Oakland County Legal News," "Michigan Probate & Estate Planning Journal," "Eye Spy Magazine" and "Surplus Today" magazine.