NEW TOOLS THAT CAN HELP
Qualifying for credit when you are new to credit is tough. These new tools try to recognize or reward you for paying bills that don’t normally factor into your score. RENT REPORTING: Paying rent is traditionally not counted toward your credit score. But many companies, including Rent Reporters, RentTrack, Rock the Score, and CreditMyRent, will let you or your landlord report your rent payments to the bureaus. PRO: • You can opt in or out of having rent reported. CONS: • Not all credit score models incorporate the data. The widely used FICO 8 scoring formula doesn’t consider rent. But VantageScore, FICO’s competitor, does. • Reporting companies charge a monthly fee of $6.95 to $9.95 and a one-time enrollment fee of $25 to $95. • Some companies report payments to only one or two credit bureaus. You want payments reported to all three. EXPERIAN BOOST: This free service lets you add on-time cell phone and utility payments to your Experian credit report. This information, which is not typically counted toward your score, is used to calculate your FICO score and can push it up higher. PROS: • You don’t need to qualify for Boost. As long as you pay utility and cell phone bills through your bank account, that information can be added to your Experian report. • Only on-time payments are added. This is different from how credit usually works, where both on-time and late payments go on credit reports. CONS: • Payments show up only in your Experian credit report, not the other two. • You have to let Experian’s data partner scan your bank account transactions. • Lenders unfamiliar with this new product may interpret your utility and cell phone information as part of your debt load, which affects your chances of qualifying for credit. Experian is “working with lenders to ensure they understand these positive payments,” spokeswoman Amanda Garofalo says. ULTRAFICO: This new score is not yet widely available, but FICO says it will roll out this spring. Unlike the traditional FICO score, UltraFICO takes into account how much you have in savings, how long your bank accounts have been open and how active they are. If you cannot qualify for a credit product with your score, you can ask lenders to pull your UltraFICO and give you a second shot.
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