Tenants who make rent payments via Zillow can opt into a new feature that can help them build credit at no cost. Starting January 17, renters can have their on-time monthly payments reported to Experian to enhance their credit history.

Zillow’s move offers a real opportunity for renters eager to access credit cards and other types of loans, even their first mortgages. Multiple studies have shown that rent reporting boosts credit scores, on average, especially for people with no or low credit scores or those with thin credit files.

How Zillow’s Rent Reporting Works

Zillow tenants can opt into the rent reporting feature through the company’s renter payments dashboard. New renters may enroll during sign-up.

To get you started, your landlord must ask Zillow to send you an invitation. Using the platform to pay your rent through bank transfers is free, credit cards have a 2.95% fee, and debit cards cost $9.95 per transaction.

Once you’re enrolled, Zillow will report your on-time rent payments to Experian monthly. Opting out is possible at any time.

Rent payments are chronically underreported. A FICO study found that rent data appears in the credit files of a mere 1.8 million renters—2% of the estimated 80 million people who live in rental housing.

One reason credit reporting is so rare among landlords is that it’s legally optional. Those who report rental payments must comply with the Fair Credit Reporting Act (FRCA), exposing them to potential litigation and other costly problems. For many landlords, it’s just not worth it.

Zillow won’t report rent payments if they’re overdue by 30 days. But if your payment is more than 30 days late, your landlord may decide to report it to credit bureaus independently, potentially affecting your credit score.

Other Rent-Reporting Platforms For Tenants

Unlike Zillow’s expansive rent reporting feature, other initiatives to encourage landlords to report rent have been limited.

For example, in December 2022 the Ohio Housing Finance Agency partnered with Esusu Financial to enhance credit scores for families in nine affordable housing developments comprising 443 rental units. Esusu, which has also partnered with Freddie Mac to cover 240,000 rentals, has a platform linked to property management software that automatically reports on-time rent payments to three national credit bureaus.

Some rent-reporting services, like Fannie Mae’s Positive Rent Payment plan, depend on landlord participation. Other free and paid programs can be used directly by tenants, such as Piñata, which will report on-time rent payments to the credit bureau TransUnion free of charge.

How On-Time Rent Payments Can Boost Your Credit Score

A history of timely rent payments can help various types of consumers raise their credit scores.

  • Consumers with no credit history. Rent payments can help “credit invisible” people establish a credit profile, which leads to the creation of a credit score.
  • Consumers with low credit scores. Adding on-time rent payments to a credit file can help demonstrate creditworthiness.
  • Consumers who simply want to improve their credit score. Positive additions to your credit report can help improve your credit score, even if it’s already good.

Since Zillow’s new feature reports only on-time payments, it protects your credit score from being undermined if your rent happens to be late.