Briggs keeps in mind that a recent research study from RentTrack found that the typical increase in credit ratings for customers reporting rent was 9 points. For subprime tenants (scores less than 650), the average increase was 29 points.
So if youve leased a house your entire life and wantwish to buy a house, you may be able to get a loan without being informed your credit file is too thin or nonexistent, presuming your rental history is documented.
Theres another reason behind the push to consist of nontraditional data like rent payments in credit reports: Studies reveal that this information normally helps consumers demonstrate their credit-worthiness.
The real value of this data is that it might lift individuals from subprime into prime ratings, states Barrett Burns, president and CEO of VantageScore Solutions LLC, which offers the VantageScore. The 2nd advantage is that it includes another payment account– or trade line– to a customers credit record, providing loan providers more information on which to base their choices.
Consumers with two or less credit accounts have thin files. Many lenders have greater restrictions on thin-file customers. Which can injure older borrowers due to the fact that individuals tend to borrow less often as they age, states Burns.
4. Free credit ratingscredit report and reports are simpler to find.
These days, its easier than ever to obtain a complimentary credit report or a free credit ratingcredit history, mainly due to the fact that theres more competitors in the credit market. The result for consumers is that now, more than ever, theyre able to much better track their credit reports and credit ratingscredit history at no expense.
FICO currently stays the most well recognized credit rating. However more institutions and customers are likewise using the VantageScore, which was collectively created by Equifax, Experian and TransUnion. Like FICO, VantageScore is a numerical credit ratingcredit report ranging from 300 to 850 points. FICO and VantageScore make use of separate solutions to calculate customer credit ratings.
A variety of banks– consisting of Ally, Bank of America, Chase and Citibank– either have begun or will begin providing free FICO credit scores this year. Those banks sign up with Discover, Barclaycard and other monetary organizations that currently supply FICO scores at no expense. Customers can also now get complimentary VantageScores from a variety of web sites, such as Credit.com, CreditKarma, LendingTree and Quizzle.
What all this implies is that the FICO credit ratingcredit history, while still extensively used by banks and lenders, isn’t really the only game in the area. With a lot competition in the credit and monetary services industry, customers can go to numerous sources to get multiple credit ratingscredit history for complimentaryfree of charge.
Lynnette Khalfani-Cox, The CashThe cash Coach(R), is a personal finance specialist, television and radio personality, and routine contributor to AARP. You can follow her on Twitter and on Facebook.