Young Americans with bad credit are taking this 1 step to boost their scores by up to 60 points — here’s how to know if it’s the right move

For younger consumers, immigrants, and others shut out of traditional lending, rent reporting services can open the door to lower interest rates, easier loan approvals, and better housing opportunities. And with rent being the largest monthly bill for many, it makes sense that consumers want credit for paying it.

Why reporting rent matters

Rent reporting helps give "credit invisible" consumers viable borrowing opportunities. According to the Consumer Financial Protection Bureau, nearly 7 million consumers in the U.S. were "credit invisible" in 2020, meaning they had no credit score (2).

When credit scores were recalculated to take rent payments into account, they improved on average by 60 points, a 2021 TransUnion analysis found. That kind of boost can be the difference between being denied for an auto loan and qualifying at a manageable interest rate (3).

“It’s a good thing that more people’s rent payments are getting reported to credit bureaus, because it can really help people improve their credit,” Matt Schulz, chief credit analyst at LendingTree, told CNBC.

Generationally, Gen Z leads the way: 18% reported their rent payments in 2025, compared with 16% of millennials, 12% of Gen Xers, and just 8% of baby boomers, according to TransUnion. Younger adults are more likely to rent and have less credit history, so rent reporting offers them an especially valuable opportunity to get established (1). Immigrants and others new to the U.S. credit system also stand to benefit, since traditional credit scoring often leaves them out.

The broader rise in rent reporting also reveals cracks in the economy. With consumer debt at record highs and many Americans struggling to qualify for loans, people are looking for new ways to strengthen their financial profile (4). It also reflects lenders’ growing interest in alternative data sources, such as cash flow and utility payments, to make more informed lending decisions (5).

Deciding whether to report rent payments

Rent reporting can be a powerful way to improve your credit score, but it isn’t risk-free. Here are a few questions to ask before signing on the dotted line.

• Do you really need it? If you already have a strong credit history, the impact may be minimal. But for someone with little or no credit, rent reporting can provide a significant boost in credit score.
• What does it cost? Some services are free, but others charge $7–$10 a month plus setup fees of $25–$95. Those costs can add up — however, your landlord may cover some of them, which is worth asking about (6).
• Who sees your data? Make sure your service reports to all three major credit bureaus — Experian, Equifax, and TransUnion. If a lender pulls your credit from the one bureau not included, your rent history won’t help.
• What data gets reported? Some services only share on-time payments, while others also report late payments. Falling behind on rent could hurt your score. *** Can you cancel — and what happens if you do? **Policies vary. Some companies stop reporting altogether once you cancel the service, which could leave a “gap” in your record that raises questions from future lenders or landlords.

It's also worth noting that rent reporting isn’t the only unconventional path to improving your credit score. Many lenders are expanding the use of alternative credit data such as bank account cash flow information, utility payments, or even subscription services. These options don’t usually carry fees and can still improve your odds of approval. See if the lenders you're working with use alternative data and consider opting in (7).

Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

CNBC (1); CFPB (2); TransUnion (3); MarketWatch (4); Library of Congress (5); Business Insider (6); Plaid (7)