Rent Reporting Services Can Help Your Credit Score, but They are Not Enough to Get You Out of Debt

One of the most frustrating things about debt is that in today’s economy, prices are higher than wages. You are not in debt because you spent carelessly on impulse purchases or lived an extravagant lifestyle; you are in debt because you went to the doctor when you were sick or because you bought groceries during financial long COVID. 

Another frustrating thing about debt is that, even though you make payments every month, the interest rates and fees are so high that your outstanding balance barely budges from one month to the next. To make matters worse, you pay all of your other bills on time, such as your rent and your utilities, and yet your credit score stubbornly remains below the range where you can get a desirable interest rate on a debt consolidation loan or borrow enough to pay off your other debts. Meanwhile, not too far away, homeowners are taking out home equity lines of credit, and their credit scores get higher every time they make a payment. Rent reporting services can offer some help in the credit score department, but for long-term solutions to your debt problems, you need an Oakland lawsuits, collections, and creditor harassment lawyer.

What are Rent Reporting Services?

The credit reporting bureaus that calculate your credit score, namely Equifax, Experian, and TransUnion, keep track of some consumer payments but not others. They notice whenever you borrow money and whenever you miss a payment on anything, but as a matter of great injustice, they raise your credit score every time you make an installment payment on a debt, but not when you pay a regular old bill, such as your electricity or cell phone. Home mortgage payments count as paying down debt, but rent payments just count as paying a bill.

Some landlords have started offering rent reporting services, where they process tenants’ rent payments through apps that report the payments to the credit reporting bureaus, helping the tenants raise their credit scores. Other services are available by subscription directly to tenants.

From Debt-Ridden Tenant to Homeowner is a Long Road

Improving your credit score through rent reporting services is a start, but you will only see your creditworthiness increase gradually, especially if you also have residual debts on which you can only afford to pay the minimum payments. Rent reporting services will not get rid of stubbornly unaffordable debts, like a credit card that you maxed out years ago and has been accruing interest and fees ever since. If the old debts are the problem and the rent that does not get reported to the credit reporting bureaus is just a symptom, then filing for bankruptcy protection might be the best solution.

Contact the Law Office of Melanie Tavare About Getting Out of a Financial Rut

A debt relief lawyer can help you if your debt balances and credit score refuse to budge even though you pay all your bills on time. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a free case evaluation.