Rent‑reporting tools offer path to stronger credit as mortgage rates climb
PHILADELPHIA (WPVI) -- With mortgage rates continuing to rise and new home construction slowing, many prospective buyers are finding homeownership increasingly out of reach.
But financial experts say renters have new options to strengthen their credit profiles by using their monthly housing payments.
Rents typically do not appear on a credit report, even though they are often a household's largest expense.
And with mortgage rates now above 7 percent-their highest levels since early 2025-more people are renting longer.
Zillow's latest analysis released this week shows Philadelphia faces a shortage of 80,675 homes.
However, there are several tools that allow renters to build credit history using on-time rent payments without taking on new debt.
One option is Zillow Payments, which reports rent payments to the three major credit bureaus.
Any landlord can offer the program through Zillow Rental Manager, and tenants can opt in.
The company says the service is free for both landlords and renters.
"If you are a renter, take advantage of this," said Mischa Fisher, who is the Chief Economist at Zillow. "So that you get all of the credit that you have been earning."
About one-third of mortgage applications are denied due to a lack of credit history, according to Zillow.
The company also notes that only one-time monthly rent payments are reported, meaning late or missed payments will not hurt a renter's credit score.
Fannie Mae allows lenders, with a borrower's permission, to use 12 months of positive rent payment history to help qualify for a mortgage.
Experian offers a similar tool called Rent Bureau, but it reports both positive and negative data-so missed or late payments can have consequences.
"Building strong credit, getting you over that credit score threshold and getting that lower payment is a tremendous boon for most people in terms of providing a little bit of extra discretionary income in their pocket at the end of the month," added Fisher.
Zillow also offers a program called Credit Climb, which the company says provides credit for up to two years of rent payments for a $20 fee.
