In the world of personal finance, one of the biggest hurdles that many Americans face is access to affordable credit. For the estimated 50 million “credit invisible” individuals in the U.S., the lack of a credit file or credit score can pose significant challenges when it comes to qualifying for a mortgage, credit card, or other financing options.
At Extreme Investor Network, we understand the importance of credit visibility and how it can impact your financial goals. That’s why we’re excited to share with you an innovative initiative by Fannie Mae that could help improve your credit standing: Positive Rent Payment Reporting.
Fannie Mae’s Positive Rent Payment Reporting program allows individuals renting in eligible properties to have their rent payments counted by credit rating agencies at no cost. This means that if you have a thin credit file, or no credit history at all, your on-time rent payments could be the key to boosting your credit score and gaining access to better financing options.
But how exactly does reporting your rent payments help improve your credit score? According to a 2021 TransUnion report, including rent payments in credit reports can lead to an average increase of nearly 60 points to your credit score. And Fannie Mae’s pilot program has already helped over 35,000 individuals establish credit scores, with participants seeing an average score increase of up to 40 points.
Take Joe Grande, for example. This Florida resident saw his credit score jump by 80 points in just three months after signing up for free reporting from his landlord through a rent reporting company. Thanks to this program, Joe is now on track to achieving his goal of buying a home and is feeling more in control of his financial future.
While these programs can certainly help build credit more quickly, it’s important to temper your expectations. Building a solid credit profile takes time and consistent repayment behavior. Additionally, be sure to review the costs and terms of the rent-reporting company you choose to work with to ensure that your payment history is being reported to all three major credit bureaus for maximum impact.
At Extreme Investor Network, we believe that everyone deserves access to affordable credit and the opportunity to achieve their financial goals. By taking advantage of initiatives like Fannie Mae’s Positive Rent Payment Reporting, you can take a proactive step towards improving your credit score and opening up new possibilities for your financial future. Stay tuned for more tips and insights on how you can optimize your personal finances and make the most of your money.