Funny how the things work. Now that Experian is adding your rental history to calculate the credit score, I can’t help but remember that sub prime lenders were way ahead of their time in this respect. If you had none or a few trade lines on your credit report, all you needed is to furnish for the underwriter 12 cancelled monthly checks showing that you paid rent. Utility bills whatever you had, cable, electric, heat would help too. Regardless, Experian move to consider rental data is going to help many. Especially in this economy where number of people paying rent is growing. Good for students and young folks who does not want to beg for someone to cosign.

Paying rent on time shows no less responsibility then paying mortgage. After all, landlords check your credit when you apply for a rental. So paying rent should help you build credit as well, and eventually get mortgages, credit cards, auto loans, etc.

The fact that Experian now takes your timely rent payments into account was helped by the last year acquisition of RentBureau. Its database covers close to 9 million renters of today’s some 96 million Americans who rent. So adding the rental history makes a lot of sense to help gauge creditworthiness of so many consumers. As of now, Experian only plans on applying timely rent payments to its credit scoring model. In 2012, it plans to include negative rental payment histories. No one knows how far back of the rental history it will take so do not think you can still be late with rent payments.

Needless to say, FICO isn’t jumping on the rental credit scoring bandwagon. According to FICO, it wants to see how this develops and is looking forward to receiving a sample of this expanded data set from Experian so it can evaluate the predictive value of rental data in Experian consumer credit reports. Of course, Experian credit report and score has not been a part of FICO just over 2 years.

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