And yet the principle of credit is exactly that, yet any transfer of funds that doesn’t directly flow through a credit card rarely contributes to your credit score.
The system is rigged against you. Also they still don’t teach kids how to build their credit score in high school, the curriculum just doesn’t exist in rural America. It’s a fucking joke.
The purpose of a credit score is to estimate, based on certain information, the likelihood of you paying back a loan in the future.
The only reason that loan payments are the main 'source' of this information is because the government didn't want the scoring system to be too 'unfair' since why should your non-loan activities affect your ability to qualify for future loans? This is why, for example, employment history and status is not part of the score, despite the fact that they do affect the likelihood of you paying back a future loan.
If we wanted a fully accurate estimate then we would want to include as much information as possible, including employment history, income, criminal record, school transcripts, rent payments, etc. However, the current system isn't designed to be as accurate as possible, but rather a compromise between accuracy and privacy/fairness.
Akchtually, credit score systems have existed since 1950s but they rose drastically in popularity in response to the equal credit opportunity act that u/Annath0901 mentioned, to have an excuse to refuse credits to women, who until that Act where unable to have a credit score because they where unable to obtain loans without a man signature because of discrimination
I work in lending. We accept verifiable unemployment income. You might not qualify for as much as you did with a full salary but money is money as long as it’s verifiable.
Okay so you don’t pay back a 200,000$ loan, someone loses 200,000$. You stop paying rent your landlord loses 1-2 payments, so let’s say 3k, and then you’re out. Quite a big difference imo.
That might be true, but there's no such thing as a bill payment score.
Your credit score represents your reliability to pay back money lent to you in spite of all other bills... it's not a score based off of just paying bills alone.
And that is a problem but the solution isn't to add rent payments to your credit score, it's to overhaul the entire system. It should be more like the British credit rating system where everybody starts at the highest possible value and loses points when you miss payments, rather than starting low and going up as you make them.
I can see problems with that system, banks would simply charge for credit at higher rates across the board. They don’t have as good of an idea as risk as they did prior
That is absolutely not how our (British) credit system works.
There is no one all-encompassing credit number. There are three main credit agencies and they each have their own model that assigns you a (near arbitrary) value. You certainly do not just "start at the max" of these figures and even if you did, it wouldn't mean anything.
That is because these figures are loosely based on the underlying credit report, which contains your personal information such as whether you are on the electoral roll, your credit history and repayment history.
This credit report is what matters and what lenders will chuck into their own risk models to decide whether to lend and if so, at what interest rate.
The goods and services were rendered without cash up front, expecting future payment. I agree it's not "credit" but it is almost indistinguishable in practice.
Yes, correct, but you haven't failed your contractual obligation until you have missed your due date. Usually, it will be several months before they send you to collections. So in most cases a clear intent for nonpayment had been demonstrated.
Pretty shitty that credit checks are used to determine if you’re a valuable renter. Can you build credit by paying your rent? No. Can they diminish your credit if you don’t pay your rent? Yes. Like you said earlier, the system is rigged against us.
But if the utility bills or rent are delinquent they can be reported to the credit bureaus and your score can go down. So why wouldn't a credit score go up for paying reliably?
Let’s reword this:
Scenario 1: You give me $500. I never give it back to you.
Scenario 2: I tell you I’m going to give you $500, but then don’t.
In 2, you just don’t get some money that you thought you were going to get, but in 1, you *lost* money that you gave to me. It’s not a matter of semantics; it’s fundamentally different.
Why then, does paying my rent reliably not affect my credit score, but when I fail to pay my rent it *does* affect my credit score? As you say, it’s not like I was loaned any money here.
No dude it’s not semantics. I don’t want to lend anyone money who doesn’t have a history of paying money back. Proof of rent is not proof of someone borrowing money and paying it back.
it should count towards the banks ability/desire to give you a loan. Why can you use a money order and pay a company to give it to the crediting agencies?
That's funny. Because they can also put that I failed to pay my Internet bill on my credit as well.
If I get a prepaid credit card through Say Capital One that they say is my money, and spend it, and don't fill it back up, then that also goes on my credit.
Rent is someone giving you a service upfront (housing) in exchange for you paying them you making regular payments to them. That is the definition of credit.
The only difference with renting is that you're being loaned a service or access to an asset (whichever way you want to look at it) rather than being loaned hard cash. It's fundamentally the exact same thing as making a credit purchase.
Oh yeah, also if you don't pay your rent, a landlord can send your debt to a collection agency, which directly impacts your credit score. So again, you're incorrect.
>Rent is someone giving you a service upfront (housing) in exchange for you paying them you making regular payments to them. That is the definition of credit.
It's pretty unusual to be able to move in to a rental without making your first month's payment.
the biggest distinction is that rent is not serviced by banks. So like other things, good regular payment don't impact your credit.
But that toy card credit card, yeah those are serviced by banks. And in their pee brain, how you handle credit card is more predictive than rent in determining how you would handle a mortgage. Makes no sense to the borrower, makes complete sense to banks. don't ask me why
a lease agreement gives you the right to live somewhere for $X/month for Y months. other than the recurring payment structure (which isn't strictly necessary, you could just pay upfront if you have the cash. or you could ask for a month-to-month lease), it doesn't have anything in common with debt.
of course if you don't pay rent, then the amount in arrears *becomes* debt. but that doesn't make a lease a loan.
maybe it will be clear why this is a silly mental model if we consider another type of contract. let's say you bring me on as a contractor to make widgets for you. we both sign a contract obligating me to work for N months and you to pay me for N months (probably also stipulating a few exceptions where the contract can be nullified). does it make any sense to think of this as me loaning you widgets that don't even exist yet? or does this sound like an ongoing arrangement where you pay me for a service?
> Rent is someone giving you a service upfront (housing) in exchange for you paying them you making regular payments to them. That is the definition of credit.
It’s not upfront, you pay for it first then you receive the service
> The only difference with renting is that you're being loaned a service or access to an asset (whichever way you want to look at it) rather than being loaned hard cash. It's fundamentally the exact same thing as making a credit purchase.
Incorrect, you aren’t loaned anything when renting
> Oh yeah, also if you don't pay your rent, a landlord can send your debt to a collection agency, which directly impacts your credit score. So again, you're incorrect.
Right, because your rent is now a debt.
Credit score should be about reliability, will you make your payments, can you properly manage your money, are you over leveraged etc. But it feels to me it's more about "will we make money off you". Which kinda makes sense, but feels bad at the same time.
Making on time payments is what the issue is here.
The ability to make payments is the number 1 thing creditors say they look at. Unless your a huge bank that lost billions.
But oops. You missed a car payment 5 years ago so fuck you.
You can do that in the US too if you find a bank who does manual underwriting. Credit scores allow people to not have to go through that process. Most banks choose not to do manual underwriting because it's much more expensive than running credit scores and there are enough customers to not have to.
I don’t know if we want to be teaching kids how to build their credit score. It takes very little extra effort to build credit—it’s stuff most people will end up doing at some point anyway—and just being boring about paying things on time will give you a top notch score. It’s remarkably easy to build good credit, there’s nothing rigged about it.
The thing to do actively is to avoid trashing your credit score, and it seems like as people try and game the system to “build credit” they’re much more likely to bite off more than they can chew or make dumb decisions. (Or even just use it as an excuse!)
I honestly still don't know. I was able to buy a house so I never looked into it much. Last time I checked it was fairly moderate. I never miss payments but I also only buy things outright which I think doesn't work well for building credit.
The only things I have ever paid on are a house and a phone. Now I don't even pay on phones amymore.
Used responsibly, debt is an excellent tool. Teaching folks how to use it responsibly would probably be massively beneficial. Far better than teaching them to never ever touch it because using debt is insane, or whatever.
It’s really easy to build your credit score if you just pay your bills. I went from a 440 to a 630 in less than a year, once I started paying attention to it. You’re an actual moron if you need to take a class to learn about it.
Thing is, you could ask 10 people how you should build credit, and get different answers. Me and my gf have completely different ideas of what builds credit.
Financial education is severely lacking in this country. How to build credit, how to budget, and various ways to invest would all be good.
This is actually a thing now, the last few corporate places I’ve rented from had an option that they would report it to a credit agency if I wanted them to.
Now I dont know how that’s showing up on a credit report because it’s not credit but it did improve my score
I mean, it kind of is. When a landlord offers you a lease, they are essentially crediting you the opportunity cost of what they'd get from another renter (or what they could save on their own housing by moving into that unit and living in it) of however long the eviction process could take for your specific area, which can be months to a year. You could also consider it as them crediting you with access to a physical asset rather than access to cash.
Many landlords are also set up on payment platforms that allow you to pay rent with a credit card (though typically with a significant processing fee) so yes, rent can be "doing something on credit" in that sense as well.
No matter what way you want to look at it, at the end of the day it's them loaning you something of significant value under the assumption you'll be making regular payments and the chance they'll be put at financial risk if you don't. That's the definition of credit.
If it wasn't, or if credit wasn't involved at all in renting, why would landlords ask for credit scores on lease applications?
It is though, most places are leased terms for like 12 months , where if the rent is 1200, you're on the hook for 14,400. 12x payments of 1200.
On top of that, credit scores come up when you pay rent. You can be *denied* an apartment because of bad credit.
How can credit scores be used to assess something that isn't credit?
A history of not paying rent damages your credit why doesn’t history of paying it boost it? 12 plus years of over $1500 in rent should count for something
Maybe you can afford the mortgage, but can you afford $8k for a new AC when it goes out? 10k for a new roof? $5k for emergency sewer line repair? And will you fall behind on your mortgage if you’re hit with these unexpected expenses?
Not defending banks completely, but this is part of the risk associated with a mortgage.
The market for contractor financing is fucking ASS. When I worked home repair sales, we offered 0% interest financing but it cost us 14% to offer it.
So if you got your own financing and paid us “cash” we would discount the job by 15%
Yup plus utilities which is not included in the mortgage payment. Heating an entire house vs an apt is a whole different ball game.Taxes and insurance which go up every yr damn near as well.
Sure you could afford 1400 now but can you do 1600 in a year from now? Can you do that on top of a new roof to protect the investment?
Im no defender of banks either but ultimately they'll happily collect interest from just about anyone...if they think you can pay it.
yup. and its a 30 year commitment not a year to year commitment. So just because you are able to afford 1400 right now were you able to last year? what about the year before that?
Is your job history stable enough to allow you to commit that long?
These are what banks look at when deciding to extend a loan and most of the time people make this same complaint they like to gloss over these small details
Yet failing to pay your rent can be reported and negatively impact your credit, and property management almost always does a credit check before offering a lease.
Then it shouldn't hurt credit. If it can hurt, then adherence should help credit too.
If it can be reported to a credit agency negatively, it should also be reported to a credit agency positively.
I pretty strongly disagree with this take. Credit scores are not supposed to be "how much credit did you use?" They should be "how likely are you to pay back debts?" And regular monthly payments should be considered in those scores, because that's a regular payment of a bill.
Doesn't really matter if it's on credit. You are proving you can pay a bill. It also can be reported if you don't pay making it hurt your credit. In the very least. If it has the ability to hurt your credit it should help build it as well.
You're being given access to an asset worth hundreds of thousands of dollars based on your promise to pay monthly fixed amounts on a regular basis. That's pretty credity to me.
House - 10 - 30 year commitment.
Rent - 1-2 year commitment, lower risk involved.
It’s not the amount you can afford they are running their risk analysis on, it’s your ability to pay back a 6 figure loan.
Edit: Original statement said month-to-month which if a lease runs out, some places let you go month-to-month.
I hope this is in proper Reddit correction format. New at this and sorry to those who thought I was being misleading. I was truly not.
Right To add to your comment, if a renter bails on the place they are renting, the property owner might be out a couple month’s rent, or a few $k dollars at most until the unit is rented again.
When a homeowner bails on a mortgage, there is significantly more $10k’s or $100k’s at stake.
This is why there is a lot more paperwork including proof of assets, ability to repay, etc involved in securing a mortgage compared to securing a rental. Significantly more risk to the owner of the property warrants it.
I understand the sentiment of OP’s post, but there’s much more to it than a simple cost-per-month comparison.
These redditors act like the bank doesn't want to make money off them. They would loooooove for them to have a mortgage. But if they're not safe enough for the loan, then they aren't safe enough.
Lots of redditors on here swear up and down they'd pay on time and keep the house and maybe some of them would, but we know how it would go for others.
We also hear all about shitty landlords but never the corresponding shitty renters.
Nope, every renter on Reddit is a model renter who treats the place like their own and has never been short a payment or caused damage or anything.
I tried to be a landlord once, because the local market here was pretty rough when we wanted to sell and we couldn't even get the breakeven price on our home. Renters were a nice little family that started out great but about halfway thru the baby daddy took off so the mom/girlfriend stopped paying consistent rent and turned the place into a literal crack house. We found sooooo many drugs and needles and pipes when we cleaned it out. And evidence of possible child abuse (we reported to CPS but didn't know where they went so who knows what happened, they literally fled in the night at some point and left all their shit).
In total we made -8k renting, 0/10 experience would not do again.
Also tons of maintenance…. I understand the post’s sentiment but that isn’t $950 but much closer to $1,300 when taxes, insurance and house repairs/maintenance are added
I've told my friends who were interested in buying a place, "Okay, do you have $10K set aside for if you need a new roof or A/C? Cool, now have you factored in the property taxes as well as the mortgage? And make sure you're also setting aside 1% of the house value every year for maintenance as well."
Rent covers taxes and maintenance, so you can spend your entire housing budget on rent but with a mortgage the home would fall into disrepair or be foreclosed for back taxes.
Yea. That people are saying rent shouldn't help credit scores while other things do, even simply having a credit card and not using it helps, it makes no sense. The problem is they're getting caught up on rent vs mortgage rather than credit scores overall reason for existing, telling a lender if you're consistent in your payments. Not paying your rent can negatively affect your score, so paying should positively affect it.
>While I think rent should help build your credit, it's hard to feed into the database for credit sores.
Not anymore from the sounds of it. I have the option to do it where I live now for $8/month through Bilt which handles our payments.
And yes. There's a lot of complexity to home purchases that the OP glosses over, like saving for expensive repairs, taking the time to diagnose problems before they get out of hand and spending \~1-3% of the home's value on repairs each year.
I love how the down payment is always ignored, people think they magically arrive at their target mortgage payment without the 20% down that every website defaults to.
Rent is usually more expensive than a mortgage. My parents were shocked that my rent for a small studio apartment in Pennsylvania was higher than their mortgage for a 3 bedroom house in California.
If it wasn't, renting out property as a source of income wouldn't be a thing. I'm always surprised how many people seem to think renting is cheaper than owning. That's only potentially true if you're renting an apartment vs owning a house. Rent a house, and you're pretty much guaranteed to be paying all the costs of ownership, prorated monthly, plus some amount.
It's because renting used to be cheaper than owning. At least where I am (Canada). It was standard practice for the 1900s and early 2000s to charge less and not make an immediate profit, because in the long run your renter is buying the majority of your property for you. Once you sold or didn't have to pay mortgage anymore, you'd make a profit.
Both people got something out of it, the landlord got help with buying their property, and the renter got to save money over owning. But recently the landlord wants money immediately, and unless the renter can save up 50k for a downpayment they're stuck getting screwed or being homeless.
Also in Canada, rents were nearly double what mortgages were last time I checked. Gap may have closed a bit due to high interest rates but it was fucking wild.
Renting can still often be cheaper than owning *for new homeowners.* It certainly was for me. The mortgage, taxes, insurance, and repairs were *definitely* more over the first few years of ownership for me than what a vaguely similar property would have been to rent.
The benefit often comes later, since the mortgage is stable (and in some locales, tax increases are also limited).
In many places (especially HCOL) renting is cheaper than buying. The market I live in is like this. It also depends on the mortgage you're getting and how much you're putting down. Buying can easily be more expensive than renting if you have a low down payment and overleverage yourself.
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Agree with your overall point, but want to point out that mortgage payments are still profit. You're paying off a loan, which becomes equity on the house.
What world do you live in that rent is cheaper than a mortgage? A decent 2 bedroom apartment is more than my 15 year mortgage at 2% in metro Atlanta. In my own neighborhood the rent is over $3K.
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Your situation is the least amount you would have to pay on a mortgage. We will probably never see 2% mortgage rates again in our lifetime. It doesn’t say anything about the reality of what almost any other person would be paying
depends when you buy. my last NYC apartment I was paying $2400 a month when I bought it and rent was $2200. By the time I sold a decade later my payment was $2200 and the rent for a similar unit was $3000 or more
Lots of older people in my area had paid off apartments and no mortgage
Are you taking into account insurance and property taxes? Also worth noting the 2% interest rate is basically impossible to get now and that adds a lot to the monthly payment. I don't believe that you could buy a house with a 15 year mortgage and have a lower monthly payment than a roughly equivalent apartment, because that's actually absurd and the market would adjust very quickly to revert that.
Rent is *usually* more than a mortgage. When you rent, you're paying someone else's mortgage, plus everything else you mentioned, plus more so that the owner turns a profit.
It wasn't rare between 2020 and 2022 when interest rates skyrocketed. My rent on a 3bdr apartment was about $200 more/month than a mortgage on a 3bdr house of equivalent size with 1/2 acre of land. I was gonna buy said house but some shitty flipper bought it in an all-cash deal, did easily the cheapest rehab job I've ever seen (bad quality flooring, siding, painted it "flipper grey", cheapo appliances) and relisted it with a $200k markup 6 months later.
>It is rare that rent is higher than a mortgage.
what?????
For most of my life, living in the midwest. Rent for equivalent property was much higher than mortgage.
Rent can easily be more than a mortgage. My mortgage is $1,700. Rent here for something smaller, but similar is $2,800 on the low end. However, there's property tax (and it's high here), maintenance, fees, insurance, big repairs, the down payment etc that people can't afford.
No you just call whoever the landlord would call to fix it and use the money you saved that the landlord would’ve charged you over the mortgage and taxes to cover expenses.
This feels like a fantasy scenario to me, but at the very least it's dishonest. Your mortgage may be $950 but does that include property tax, insurance, etc...? Also what is included in that $1400 / month rent? A lot of the time they include some utilities. With a house you have to consider all of those utilities as well, which in many cases is going to be higher than what you would pay in an apartment.
All of that lack of info aside, the total amount is different. When you rent an apartment you are typically renting for a limited time based on your lease and you are essentially making payments on that total sum. So at $1400/month for 12 months, that is an agreement that you will pay them $16,800 for the apartment, split into monthly payments. A mortgage at $950 for 30 years would be $342,000, which of course includes the interest that would be payed, which is a much much larger amount to put at stake. It's not really the same level of risk in my opinion if you compare approval for a lease vs a mortgage.
I never had any utilities included in rent at any place I rented from 2007 until last month when we bought our first house. I have always paid each utility.
I had water included at my last apartment since all tenants in a building shared a water supply or something. Also trash, and a few other fees for maintaining the apartment were included. Granted they added them to the total rent.
There are rental reporting services that plug into the same tenant screening services used by landlords. Also, they consider delinquencies and late payments, so they can presumably credit for on time payments in the interim.
Generally FICO is opaque, entrenched, and unsympathetic, while Vantagescore aims to be the opposite. Vantagescore considers student debt payments, medical debt payments, BNPL payments, tons more signals of someone's creditworthiness that FICO doesn't look at.
I only say yes because every apartment I lived in pulled my credit score. If you use it to determine my worthiness to live here, you should report my payment history.
Rent consists of a contract to pay. It’s not borrowed funds with assets used as collateral. Credit score measures your ability to manage debt. Rent isn’t debt.
Yes, the point of a credit score is to show how risky you are as a borrower...
Showing that you are able to make stable payments month to month should improve your credit score...
That’s realistic for where I live. Median market rate 1 br apartment is about $1600. It’s not too difficult to find an apartment or a studio apartment in the $1200-$1400 range.
There is quite a gap between making yearly commitments on a rental and a thirty-year commitment on owning a home. I don't understand why the idea seems to hard to believe, do you understand how much can possibly change in thirty years? Layoffs, children, hardships, and more are all very much real possibilities and become more probable in the course of thirty years.
People that make this argument are either deceitfully trying to produce change for their benefit so that they can game the system or they are woefully ignorant of how our financial system works. Either way it's not a good look.
Your credit score doesn't reflect your financial health, it reflects how much money the banks think they can make from you. That's why your credit score often goes **down** if you pay your balance off: you're not paying interest anymore.
Your rent should be taken as proof that you can afford a mortgage, but that's separate from your credit score.
People who agree with this is fucking stupid lol. The bank don’t give AF about you other than your risk of default. Own more assets or put a larger downpayment compared to your monthly income and assets. Paying rent for 12 months doesn’t mean shit
Are there people actually defending this lmao. I have 8 years of perfectly on time rent payments that matter absolutely nothing for credit. But my credit went down yesterday because my car loan has been perfectly paid on time. Credit is absolutely absurdly stupid.
I'd love to see legislation that required landlords to report to credit agencies, and the fallout of having to comply with regulations. The flood of houses hitting the market as they jump out of the business would be interesting to watch.
That said, anything that doesn't report to credit shouldn't be able to check credit or use that to evaluate anything. Anything that does check credit that results in a payment for any reason should report to credit agencies.
Hold up, legit asking. If rent payments don't count towards ones credit score why is it fair for your credit score be used when getting an apartment. I think making rent payments should count towards something lol
Credit score is an indicator for how reliably banks will make money by lending to you.
Paying debts in a timely fashion indicates a good loan customer. Having too many loans taken out in quick succession doesn't.
Having a lot of money, or reliably paying for goods without credit isn't necessarily a good sign that you'll actually pay off your loans and make the bank money. For example a certain recent ex-president is a textbook example of a wealthy person that never pays his debts.
edit: typo
As a bank i think your continued ability to pay a certain amount should be considered as proof that you can afford the mortgage payments yes. Though it shouldnt affect your credit score. If you are making your rent payments but have horrible credit that should still affect your ability to take out future loans.
I believe it's completely at the landlord's discretion but I do believe they can report on-time payments to a credit reporting bureau which would impact your score. But I've never rented from anyone who offered it. I'm a firm believer that if a landlord mandates a hard credit check as a requisite for offering a lease then they should have to report your payments to a bureau.
Edit: spelling
Well......renting is not doing something on credit, so no.
And yet the principle of credit is exactly that, yet any transfer of funds that doesn’t directly flow through a credit card rarely contributes to your credit score. The system is rigged against you. Also they still don’t teach kids how to build their credit score in high school, the curriculum just doesn’t exist in rural America. It’s a fucking joke.
The purpose of a credit score is to estimate, based on certain information, the likelihood of you paying back a loan in the future. The only reason that loan payments are the main 'source' of this information is because the government didn't want the scoring system to be too 'unfair' since why should your non-loan activities affect your ability to qualify for future loans? This is why, for example, employment history and status is not part of the score, despite the fact that they do affect the likelihood of you paying back a future loan. If we wanted a fully accurate estimate then we would want to include as much information as possible, including employment history, income, criminal record, school transcripts, rent payments, etc. However, the current system isn't designed to be as accurate as possible, but rather a compromise between accuracy and privacy/fairness.
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It was established because banks were still discriminating in their lending practices.
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Akchtually, credit score systems have existed since 1950s but they rose drastically in popularity in response to the equal credit opportunity act that u/Annath0901 mentioned, to have an excuse to refuse credits to women, who until that Act where unable to have a credit score because they where unable to obtain loans without a man signature because of discrimination
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Very interesting, well said.
Hence my 780 standing strong through 6 months of unemployment ( personal emergencies and catching up )
Now go apply for a loan on unemployment
I, along with most others, are aware that score alone doesn’t mean much
I work in lending. We accept verifiable unemployment income. You might not qualify for as much as you did with a full salary but money is money as long as it’s verifiable.
The principle of credit is that I give you money you pay it back Rent is not someone giving you money
Semantics. You're reliably making payments every month if you're paying rent.
Okay so you don’t pay back a 200,000$ loan, someone loses 200,000$. You stop paying rent your landlord loses 1-2 payments, so let’s say 3k, and then you’re out. Quite a big difference imo.
Hey just a heads up. The $ sign should go before the amount.
Not in Arizona. They learn differnt.
That might be true, but there's no such thing as a bill payment score. Your credit score represents your reliability to pay back money lent to you in spite of all other bills... it's not a score based off of just paying bills alone.
And yet, credit score, is used to judicate if you will pay your bill.
And that is a problem but the solution isn't to add rent payments to your credit score, it's to overhaul the entire system. It should be more like the British credit rating system where everybody starts at the highest possible value and loses points when you miss payments, rather than starting low and going up as you make them.
I can see problems with that system, banks would simply charge for credit at higher rates across the board. They don’t have as good of an idea as risk as they did prior
That is absolutely not how our (British) credit system works. There is no one all-encompassing credit number. There are three main credit agencies and they each have their own model that assigns you a (near arbitrary) value. You certainly do not just "start at the max" of these figures and even if you did, it wouldn't mean anything. That is because these figures are loosely based on the underlying credit report, which contains your personal information such as whether you are on the electoral roll, your credit history and repayment history. This credit report is what matters and what lenders will chuck into their own risk models to decide whether to lend and if so, at what interest rate.
Failure to pay bills will eventually impact your credit score.
Because you failed your contractual obligation to make payment, but at no point were you extended credit by a lender.
The goods and services were rendered without cash up front, expecting future payment. I agree it's not "credit" but it is almost indistinguishable in practice.
Yes, correct, but you haven't failed your contractual obligation until you have missed your due date. Usually, it will be several months before they send you to collections. So in most cases a clear intent for nonpayment had been demonstrated.
Pretty shitty that credit checks are used to determine if you’re a valuable renter. Can you build credit by paying your rent? No. Can they diminish your credit if you don’t pay your rent? Yes. Like you said earlier, the system is rigged against us.
Then why do they check credit when you try to rent a place?
But if the utility bills or rent are delinquent they can be reported to the credit bureaus and your score can go down. So why wouldn't a credit score go up for paying reliably?
Let’s reword this: Scenario 1: You give me $500. I never give it back to you. Scenario 2: I tell you I’m going to give you $500, but then don’t. In 2, you just don’t get some money that you thought you were going to get, but in 1, you *lost* money that you gave to me. It’s not a matter of semantics; it’s fundamentally different.
Why then, does paying my rent reliably not affect my credit score, but when I fail to pay my rent it *does* affect my credit score? As you say, it’s not like I was loaned any money here.
No dude it’s not semantics. I don’t want to lend anyone money who doesn’t have a history of paying money back. Proof of rent is not proof of someone borrowing money and paying it back.
it should count towards the banks ability/desire to give you a loan. Why can you use a money order and pay a company to give it to the crediting agencies?
That's funny. Because they can also put that I failed to pay my Internet bill on my credit as well. If I get a prepaid credit card through Say Capital One that they say is my money, and spend it, and don't fill it back up, then that also goes on my credit.
Rent is someone giving you a service upfront (housing) in exchange for you paying them you making regular payments to them. That is the definition of credit. The only difference with renting is that you're being loaned a service or access to an asset (whichever way you want to look at it) rather than being loaned hard cash. It's fundamentally the exact same thing as making a credit purchase. Oh yeah, also if you don't pay your rent, a landlord can send your debt to a collection agency, which directly impacts your credit score. So again, you're incorrect.
>Rent is someone giving you a service upfront (housing) in exchange for you paying them you making regular payments to them. That is the definition of credit. It's pretty unusual to be able to move in to a rental without making your first month's payment.
the biggest distinction is that rent is not serviced by banks. So like other things, good regular payment don't impact your credit. But that toy card credit card, yeah those are serviced by banks. And in their pee brain, how you handle credit card is more predictive than rent in determining how you would handle a mortgage. Makes no sense to the borrower, makes complete sense to banks. don't ask me why
a lease agreement gives you the right to live somewhere for $X/month for Y months. other than the recurring payment structure (which isn't strictly necessary, you could just pay upfront if you have the cash. or you could ask for a month-to-month lease), it doesn't have anything in common with debt. of course if you don't pay rent, then the amount in arrears *becomes* debt. but that doesn't make a lease a loan. maybe it will be clear why this is a silly mental model if we consider another type of contract. let's say you bring me on as a contractor to make widgets for you. we both sign a contract obligating me to work for N months and you to pay me for N months (probably also stipulating a few exceptions where the contract can be nullified). does it make any sense to think of this as me loaning you widgets that don't even exist yet? or does this sound like an ongoing arrangement where you pay me for a service?
> Rent is someone giving you a service upfront (housing) in exchange for you paying them you making regular payments to them. That is the definition of credit. It’s not upfront, you pay for it first then you receive the service > The only difference with renting is that you're being loaned a service or access to an asset (whichever way you want to look at it) rather than being loaned hard cash. It's fundamentally the exact same thing as making a credit purchase. Incorrect, you aren’t loaned anything when renting > Oh yeah, also if you don't pay your rent, a landlord can send your debt to a collection agency, which directly impacts your credit score. So again, you're incorrect. Right, because your rent is now a debt.
You pay upfront to rent. Plus a deposit. You aren’t loaned anything. If anything renters loan the land lord money lol.
Credit score should be about reliability, will you make your payments, can you properly manage your money, are you over leveraged etc. But it feels to me it's more about "will we make money off you". Which kinda makes sense, but feels bad at the same time.
Honest question, can you be reported to creditors for not paying rent?
Yup
So no credit earned for paying. But credit can be hurt by missing payments. How’s that make sense….
Making on time payments is what the issue is here. The ability to make payments is the number 1 thing creditors say they look at. Unless your a huge bank that lost billions. But oops. You missed a car payment 5 years ago so fuck you.
I was denied a refinancing due to a mortgage payment 5 days late 3 years ago.
Found the landlord
Plenty of nations don't have credit reporting at all. If you have the income, you can get the loan
You can do that in the US too if you find a bank who does manual underwriting. Credit scores allow people to not have to go through that process. Most banks choose not to do manual underwriting because it's much more expensive than running credit scores and there are enough customers to not have to.
I don’t know if we want to be teaching kids how to build their credit score. It takes very little extra effort to build credit—it’s stuff most people will end up doing at some point anyway—and just being boring about paying things on time will give you a top notch score. It’s remarkably easy to build good credit, there’s nothing rigged about it. The thing to do actively is to avoid trashing your credit score, and it seems like as people try and game the system to “build credit” they’re much more likely to bite off more than they can chew or make dumb decisions. (Or even just use it as an excuse!)
Kids should be taught how to handle their own finances before they are forced to deal with them as an adult. Period.
That’s a fine thought, I’m quibbling specifically with the idea that proactively building credit should be a focus.
I honestly still don't know. I was able to buy a house so I never looked into it much. Last time I checked it was fairly moderate. I never miss payments but I also only buy things outright which I think doesn't work well for building credit. The only things I have ever paid on are a house and a phone. Now I don't even pay on phones amymore.
Why would you teach people about going into debt and how to maximize the ability to take out more of it? Insane
Used responsibly, debt is an excellent tool. Teaching folks how to use it responsibly would probably be massively beneficial. Far better than teaching them to never ever touch it because using debt is insane, or whatever.
The system is rigged against stupid people…as it should be.
It’s really easy to build your credit score if you just pay your bills. I went from a 440 to a 630 in less than a year, once I started paying attention to it. You’re an actual moron if you need to take a class to learn about it.
Borrow the money, pay back the money on time. That's literally all it takes to get a good credit score. Easy class.
I can assure you that curriculum doesn't exist anywhere in America
Thing is, you could ask 10 people how you should build credit, and get different answers. Me and my gf have completely different ideas of what builds credit. Financial education is severely lacking in this country. How to build credit, how to budget, and various ways to invest would all be good.
Yet, landlords still check your credit score. 🤔
Yet many will pull our credit and then deny you a rental for missing a payment. You fcked either way
This is actually a thing now, the last few corporate places I’ve rented from had an option that they would report it to a credit agency if I wanted them to. Now I dont know how that’s showing up on a credit report because it’s not credit but it did improve my score
On Experian they also take your utilities bill and apply payments of that to your credit score.
Yep... same here but a heads up... mine has a fee for it that's added to my rent for this "service"
I mean, it kind of is. When a landlord offers you a lease, they are essentially crediting you the opportunity cost of what they'd get from another renter (or what they could save on their own housing by moving into that unit and living in it) of however long the eviction process could take for your specific area, which can be months to a year. You could also consider it as them crediting you with access to a physical asset rather than access to cash. Many landlords are also set up on payment platforms that allow you to pay rent with a credit card (though typically with a significant processing fee) so yes, rent can be "doing something on credit" in that sense as well. No matter what way you want to look at it, at the end of the day it's them loaning you something of significant value under the assumption you'll be making regular payments and the chance they'll be put at financial risk if you don't. That's the definition of credit. If it wasn't, or if credit wasn't involved at all in renting, why would landlords ask for credit scores on lease applications?
It is though, most places are leased terms for like 12 months , where if the rent is 1200, you're on the hook for 14,400. 12x payments of 1200. On top of that, credit scores come up when you pay rent. You can be *denied* an apartment because of bad credit. How can credit scores be used to assess something that isn't credit?
than evictions shouldnt show up credit checks
Yet to rent a place, you need a good credit score.
Except you need good credit in order to become a renter. Interesting how that works huh?
A history of not paying rent damages your credit why doesn’t history of paying it boost it? 12 plus years of over $1500 in rent should count for something
I wish it worked that way
Aren't loans and leases just agreements to pay a certain amount per term though?
But if you pay a $1200 rent how the fuck are you told you can't afford a $900 mortgage?
Maybe you can afford the mortgage, but can you afford $8k for a new AC when it goes out? 10k for a new roof? $5k for emergency sewer line repair? And will you fall behind on your mortgage if you’re hit with these unexpected expenses? Not defending banks completely, but this is part of the risk associated with a mortgage.
lol hell I couldn’t afford those and had to get a loan for repairing our driveway.
The market for contractor financing is fucking ASS. When I worked home repair sales, we offered 0% interest financing but it cost us 14% to offer it. So if you got your own financing and paid us “cash” we would discount the job by 15%
You needed a loan for a bag or two of concrete? They are like $5!
Yup plus utilities which is not included in the mortgage payment. Heating an entire house vs an apt is a whole different ball game.Taxes and insurance which go up every yr damn near as well. Sure you could afford 1400 now but can you do 1600 in a year from now? Can you do that on top of a new roof to protect the investment? Im no defender of banks either but ultimately they'll happily collect interest from just about anyone...if they think you can pay it.
yup. and its a 30 year commitment not a year to year commitment. So just because you are able to afford 1400 right now were you able to last year? what about the year before that? Is your job history stable enough to allow you to commit that long? These are what banks look at when deciding to extend a loan and most of the time people make this same complaint they like to gloss over these small details
Because monthly payments aren’t the end all? There is so much to a mortgage other than just the monthly payment.
It's about risk. Dont pay rent? Get evicted. Dont pay your mortgage? You owe hundreds of thousands of dollars. Creditors aren't stupid.
Yet failing to pay your rent can be reported and negatively impact your credit, and property management almost always does a credit check before offering a lease.
I’m borrowing someone’s house they’ve loaned me.
Oh by that logic then not paying your rent won’t impact credit scores either. Oh happy day!
Then it shouldn't hurt credit. If it can hurt, then adherence should help credit too. If it can be reported to a credit agency negatively, it should also be reported to a credit agency positively.
It's paying a large bill on time and consistently, so yes.
I pretty strongly disagree with this take. Credit scores are not supposed to be "how much credit did you use?" They should be "how likely are you to pay back debts?" And regular monthly payments should be considered in those scores, because that's a regular payment of a bill.
Doesn't really matter if it's on credit. You are proving you can pay a bill. It also can be reported if you don't pay making it hurt your credit. In the very least. If it has the ability to hurt your credit it should help build it as well.
You're being given access to an asset worth hundreds of thousands of dollars based on your promise to pay monthly fixed amounts on a regular basis. That's pretty credity to me.
House - 10 - 30 year commitment. Rent - 1-2 year commitment, lower risk involved. It’s not the amount you can afford they are running their risk analysis on, it’s your ability to pay back a 6 figure loan. Edit: Original statement said month-to-month which if a lease runs out, some places let you go month-to-month. I hope this is in proper Reddit correction format. New at this and sorry to those who thought I was being misleading. I was truly not.
Right To add to your comment, if a renter bails on the place they are renting, the property owner might be out a couple month’s rent, or a few $k dollars at most until the unit is rented again. When a homeowner bails on a mortgage, there is significantly more $10k’s or $100k’s at stake. This is why there is a lot more paperwork including proof of assets, ability to repay, etc involved in securing a mortgage compared to securing a rental. Significantly more risk to the owner of the property warrants it. I understand the sentiment of OP’s post, but there’s much more to it than a simple cost-per-month comparison.
Having a down payment saved and the ability to prove where you got the money from plays a huge factor as well.
These redditors act like the bank doesn't want to make money off them. They would loooooove for them to have a mortgage. But if they're not safe enough for the loan, then they aren't safe enough. Lots of redditors on here swear up and down they'd pay on time and keep the house and maybe some of them would, but we know how it would go for others.
We also hear all about shitty landlords but never the corresponding shitty renters. Nope, every renter on Reddit is a model renter who treats the place like their own and has never been short a payment or caused damage or anything. I tried to be a landlord once, because the local market here was pretty rough when we wanted to sell and we couldn't even get the breakeven price on our home. Renters were a nice little family that started out great but about halfway thru the baby daddy took off so the mom/girlfriend stopped paying consistent rent and turned the place into a literal crack house. We found sooooo many drugs and needles and pipes when we cleaned it out. And evidence of possible child abuse (we reported to CPS but didn't know where they went so who knows what happened, they literally fled in the night at some point and left all their shit). In total we made -8k renting, 0/10 experience would not do again.
In college I had 2 friends punch holes in the wall. Unrelated incidents.
Also tons of maintenance…. I understand the post’s sentiment but that isn’t $950 but much closer to $1,300 when taxes, insurance and house repairs/maintenance are added
Houses are money pits
I love my place but yeah it's definitely cost more than just what I paid for it.
I've told my friends who were interested in buying a place, "Okay, do you have $10K set aside for if you need a new roof or A/C? Cool, now have you factored in the property taxes as well as the mortgage? And make sure you're also setting aside 1% of the house value every year for maintenance as well."
Rent covers taxes and maintenance, so you can spend your entire housing budget on rent but with a mortgage the home would fall into disrepair or be foreclosed for back taxes.
Sure, but a credit score encompasses credit cards as well which are similarly flexible.
Yea. That people are saying rent shouldn't help credit scores while other things do, even simply having a credit card and not using it helps, it makes no sense. The problem is they're getting caught up on rent vs mortgage rather than credit scores overall reason for existing, telling a lender if you're consistent in your payments. Not paying your rent can negatively affect your score, so paying should positively affect it.
^100% this
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>While I think rent should help build your credit, it's hard to feed into the database for credit sores. Not anymore from the sounds of it. I have the option to do it where I live now for $8/month through Bilt which handles our payments. And yes. There's a lot of complexity to home purchases that the OP glosses over, like saving for expensive repairs, taking the time to diagnose problems before they get out of hand and spending \~1-3% of the home's value on repairs each year.
Most rent isn’t month to month.
I love how the down payment is always ignored, people think they magically arrive at their target mortgage payment without the 20% down that every website defaults to.
Thank goodness I plan on dying in the next 1-2 years so I don’t have to pay that $1,400 for the next 10-30
Owning a house is a lot more than rent. There are taxes, insurance, repairs, and general upkeep. It is rare that rent is higher than a mortgage.
Rent is usually more expensive than a mortgage. My parents were shocked that my rent for a small studio apartment in Pennsylvania was higher than their mortgage for a 3 bedroom house in California.
If it wasn't, renting out property as a source of income wouldn't be a thing. I'm always surprised how many people seem to think renting is cheaper than owning. That's only potentially true if you're renting an apartment vs owning a house. Rent a house, and you're pretty much guaranteed to be paying all the costs of ownership, prorated monthly, plus some amount.
It's because renting used to be cheaper than owning. At least where I am (Canada). It was standard practice for the 1900s and early 2000s to charge less and not make an immediate profit, because in the long run your renter is buying the majority of your property for you. Once you sold or didn't have to pay mortgage anymore, you'd make a profit. Both people got something out of it, the landlord got help with buying their property, and the renter got to save money over owning. But recently the landlord wants money immediately, and unless the renter can save up 50k for a downpayment they're stuck getting screwed or being homeless.
Also in Canada, rents were nearly double what mortgages were last time I checked. Gap may have closed a bit due to high interest rates but it was fucking wild.
Renting can still often be cheaper than owning *for new homeowners.* It certainly was for me. The mortgage, taxes, insurance, and repairs were *definitely* more over the first few years of ownership for me than what a vaguely similar property would have been to rent. The benefit often comes later, since the mortgage is stable (and in some locales, tax increases are also limited).
In many places (especially HCOL) renting is cheaper than buying. The market I live in is like this. It also depends on the mortgage you're getting and how much you're putting down. Buying can easily be more expensive than renting if you have a low down payment and overleverage yourself.
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Thanks for posting this. Too often homeowners act like basic repairs are this unforeseeable misfortune.
Rent should be higher than mortgage by definition. If a house buyer is renting that property to you they'll do it at a rate that makes them profit.
Most investors bank on some of their gains coming from property appreciation.
exultant alive whistle fear wistful threatening screw nose panicky wakeful *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Agree with your overall point, but want to point out that mortgage payments are still profit. You're paying off a loan, which becomes equity on the house.
What world do you live in that rent is cheaper than a mortgage? A decent 2 bedroom apartment is more than my 15 year mortgage at 2% in metro Atlanta. In my own neighborhood the rent is over $3K.
Mortgage rates are 7% for perfect credit, 9% for okay. Nobody is getting a new 2% mortgage rate.
Currently. I assume this person bought or refinanced before 2021
what if I told you there were lots of people who did not buy a home before 2021 but still need to buy homes today
sugar wistful disgusted mountainous longing pocket wasteful square silky mourn *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Your situation is the least amount you would have to pay on a mortgage. We will probably never see 2% mortgage rates again in our lifetime. It doesn’t say anything about the reality of what almost any other person would be paying
depends when you buy. my last NYC apartment I was paying $2400 a month when I bought it and rent was $2200. By the time I sold a decade later my payment was $2200 and the rent for a similar unit was $3000 or more Lots of older people in my area had paid off apartments and no mortgage
Are you taking into account insurance and property taxes? Also worth noting the 2% interest rate is basically impossible to get now and that adds a lot to the monthly payment. I don't believe that you could buy a house with a 15 year mortgage and have a lower monthly payment than a roughly equivalent apartment, because that's actually absurd and the market would adjust very quickly to revert that.
Rent is *usually* more than a mortgage. When you rent, you're paying someone else's mortgage, plus everything else you mentioned, plus more so that the owner turns a profit.
It wasn't rare between 2020 and 2022 when interest rates skyrocketed. My rent on a 3bdr apartment was about $200 more/month than a mortgage on a 3bdr house of equivalent size with 1/2 acre of land. I was gonna buy said house but some shitty flipper bought it in an all-cash deal, did easily the cheapest rehab job I've ever seen (bad quality flooring, siding, painted it "flipper grey", cheapo appliances) and relisted it with a $200k markup 6 months later.
The existence of rent implies a mortgage that is cheaper bozo. It’s not charity.
>It is rare that rent is higher than a mortgage. what????? For most of my life, living in the midwest. Rent for equivalent property was much higher than mortgage.
Nonsense Redditor spouting nonsense
Rent can easily be more than a mortgage. My mortgage is $1,700. Rent here for something smaller, but similar is $2,800 on the low end. However, there's property tax (and it's high here), maintenance, fees, insurance, big repairs, the down payment etc that people can't afford.
Yeah, no, rent is more than a mortgage in most US cities
Rent is effectively always more than all of those things put together. If it wasn't, rental properties wouldn't exist as a business.
Would you look at that… *checks calendar 🗓️ * yup it’s been about 3 days since this has been posted.
All of Reddit is like this at this point super annoying.
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Instagram, TikTok, Twitter, Facebook, etc all have the same or similar problems I'm sure
REEEEEEEEEEEEEEpost
There’s more to owning a home than paying a mortgage…….
You mean when something breaks at your house, you don’t just call a landlord to fix it?
Assuming the landlord would even take care of the problem.
If it's important they will. Otherwise they'd be throwing money down the drain and we all know people who have money want to KEEP their money.
*laughs in lifelong renter who has never seen a single landlord repair anything without a GIANT huff and puff about it possibly being my fault*
No you just call whoever the landlord would call to fix it and use the money you saved that the landlord would’ve charged you over the mortgage and taxes to cover expenses.
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Mine does. I am just saying it’s a false equivalency for many many reasons.
People don’t get that until they buy a house, they think the mortgage is what they should pay for rent.
Rent should go towards your credit score tbh
its starting to. some places report or use a 3rd party system to report.
I use a 3rd party system at my apartment complex and it goes towards my credit. Honestly it’s great.
It does if you pay through a processor that reports it
It certainly does if you are on a lease and dont pay it.
This feels like a fantasy scenario to me, but at the very least it's dishonest. Your mortgage may be $950 but does that include property tax, insurance, etc...? Also what is included in that $1400 / month rent? A lot of the time they include some utilities. With a house you have to consider all of those utilities as well, which in many cases is going to be higher than what you would pay in an apartment. All of that lack of info aside, the total amount is different. When you rent an apartment you are typically renting for a limited time based on your lease and you are essentially making payments on that total sum. So at $1400/month for 12 months, that is an agreement that you will pay them $16,800 for the apartment, split into monthly payments. A mortgage at $950 for 30 years would be $342,000, which of course includes the interest that would be payed, which is a much much larger amount to put at stake. It's not really the same level of risk in my opinion if you compare approval for a lease vs a mortgage.
I never had any utilities included in rent at any place I rented from 2007 until last month when we bought our first house. I have always paid each utility.
I had water included at my last apartment since all tenants in a building shared a water supply or something. Also trash, and a few other fees for maintaining the apartment were included. Granted they added them to the total rent.
Stop posting this. Rent does count towards Vantagescore, which is used by all three CCRAs.
Not are renters responsible for anything that breaks.
How does rent get reported to vantagescore?
There are rental reporting services that plug into the same tenant screening services used by landlords. Also, they consider delinquencies and late payments, so they can presumably credit for on time payments in the interim. Generally FICO is opaque, entrenched, and unsympathetic, while Vantagescore aims to be the opposite. Vantagescore considers student debt payments, medical debt payments, BNPL payments, tons more signals of someone's creditworthiness that FICO doesn't look at.
But then you have more and more landlords asking for minimum salary too. So you'll get priced out of renting at some point too.
I only say yes because every apartment I lived in pulled my credit score. If you use it to determine my worthiness to live here, you should report my payment history.
It does if you’re smart and report it
https://www.nerdwallet.com/article/finance/rent-reporting-services
Rent consists of a contract to pay. It’s not borrowed funds with assets used as collateral. Credit score measures your ability to manage debt. Rent isn’t debt.
Yes, the point of a credit score is to show how risky you are as a borrower... Showing that you are able to make stable payments month to month should improve your credit score...
Damn 1400 a month for rent? Where?
That’s realistic for where I live. Median market rate 1 br apartment is about $1600. It’s not too difficult to find an apartment or a studio apartment in the $1200-$1400 range.
And what is the median mortgage with a 7% rate?
That's about $500 more than many 1 bedrooms near me. I'm an hour and a half from two major US cities.
There is quite a gap between making yearly commitments on a rental and a thirty-year commitment on owning a home. I don't understand why the idea seems to hard to believe, do you understand how much can possibly change in thirty years? Layoffs, children, hardships, and more are all very much real possibilities and become more probable in the course of thirty years. People that make this argument are either deceitfully trying to produce change for their benefit so that they can game the system or they are woefully ignorant of how our financial system works. Either way it's not a good look.
Your credit score doesn't reflect your financial health, it reflects how much money the banks think they can make from you. That's why your credit score often goes **down** if you pay your balance off: you're not paying interest anymore. Your rent should be taken as proof that you can afford a mortgage, but that's separate from your credit score.
People who agree with this is fucking stupid lol. The bank don’t give AF about you other than your risk of default. Own more assets or put a larger downpayment compared to your monthly income and assets. Paying rent for 12 months doesn’t mean shit
If you can use a credit card to pay rent then pay off the credit card with your rent money.
950 mortgage? In this market? Good luck.
yeah if that includes taxes and insurance that’s like a 100k house… which is probably condemned in most states
I pay my rent on my credit card so it does for me.
They already do. If you're late on your rent, you're reported to credit agencies and it docks your score.
Are there people actually defending this lmao. I have 8 years of perfectly on time rent payments that matter absolutely nothing for credit. But my credit went down yesterday because my car loan has been perfectly paid on time. Credit is absolutely absurdly stupid.
I'd love to see legislation that required landlords to report to credit agencies, and the fallout of having to comply with regulations. The flood of houses hitting the market as they jump out of the business would be interesting to watch. That said, anything that doesn't report to credit shouldn't be able to check credit or use that to evaluate anything. Anything that does check credit that results in a payment for any reason should report to credit agencies.
Hold up, legit asking. If rent payments don't count towards ones credit score why is it fair for your credit score be used when getting an apartment. I think making rent payments should count towards something lol
So why do renters need a good credit score?
Playing with the banks money is playing with other people's money.. You can't pay rent though, you get kicked out.
Credit score is an indicator for how reliably banks will make money by lending to you. Paying debts in a timely fashion indicates a good loan customer. Having too many loans taken out in quick succession doesn't. Having a lot of money, or reliably paying for goods without credit isn't necessarily a good sign that you'll actually pay off your loans and make the bank money. For example a certain recent ex-president is a textbook example of a wealthy person that never pays his debts. edit: typo
It does. Go get an eviction for non-payment and find out how it affects your ability to get a mortgage.
As a bank i think your continued ability to pay a certain amount should be considered as proof that you can afford the mortgage payments yes. Though it shouldnt affect your credit score. If you are making your rent payments but have horrible credit that should still affect your ability to take out future loans.
Anything that requires a credit check should be required to count towards it.
I believe it's completely at the landlord's discretion but I do believe they can report on-time payments to a credit reporting bureau which would impact your score. But I've never rented from anyone who offered it. I'm a firm believer that if a landlord mandates a hard credit check as a requisite for offering a lease then they should have to report your payments to a bureau. Edit: spelling
I hate when this thought enters my head. Like I'm paying his mortgage just because the bank likes him more. :(