When you pay rent each month where does it go? I usually just think about how it goes straight into my landlord’s pockets. I would get frustrated at the beginning of the month when I had to write my rent check. Then I started paying my rent online and I can see how paying my rent benefits not only my landlord but also my credit score. Now I can feel good about paying my rent each month because I know it’s ultimately benefitting me.
WilliamPaid verifies your online rent payments and reports them to a credit bureau to help build your FICO credit score. Five things determine your FICO score:
- Payment History
- Amounts Owed
- Length of Credit History
- New Credit
- Types of Credit Owed
Building your credit can seem like a daunting task. I’m not a financial guru but there are some steps I’ve learned to take to help increase my credit score.
Start Small
The first step in increasing your credit score is actually having credit. If you have no credit history or low credit, get a credit card and make small payments on it to prove your financial responsibility. I got a credit card when I was in college and only used it to pay for gas for my car. I made small charges on the card and paid them off promptly each month. You have to crawl before you can walk and making small payments on a credit card can go a long way in proving you are responsible and creditworthy.
Always Pay Your Bills on Time
The greatest factor in determining your credit score is your payment history. 35% of your FICO score is determined by your ability to pay your bills on time. Ever since I started paying my rent online, I don’t have to worry about being late with my rent because it is automatically taken out of my account at the beginning of the month.
Don’t Apply For Credit Cards You Don’t Need
Many stores offer discounts when you open a credit card with them. When you apply for those, an inquiry is made on your credit report and those can add up to many dings on your credit score. Only open new credit when you need it. The 10 or 15% discount you receive at a retail store isn’t always worth it!
Monitor Your Credit Score
Check your credit score online and verify that the credit history on there is, in fact, yours. Your credit report can sometimes be affected by false or inaccurate information. Monitor your score on sites like AnnualCreditReport.com to ensure there are no errors.
