Experian today announced a new product to help renters convert their on-time rental payments into good credit. Up until now Experian had only really been adding rental history through its RentBureau product that is used by big apartment complexes. Now they’ve launched a new product for use by all landlords, big or small.
ClearNow allows for landlords to collect payments from tenants electronically and in turn passes that payment information on to the Experian credit report. The service also offers tenants the option to pay their rent monthly, biweekly, or semimonthly. A nice feature.
The ClearNow service reports payment performance to both Experian and the PRBC credit reporting agency. PRBC is an alternative credit reporting service that is designed for people with little to no traditional credit history. Here is a sample PRBC credit report.
According to the ClearNow website, tenant payment information is not reported to the credit bureaus until after four payments are received and then they will report on a monthly basis. – Source
“We’re thrilled to offer a simple way for many responsible Americans to get the credit they deserve by making their rental payments as agreed,” said Steven Wagner, president, Experian Consumer Information Services. “In the past year, we have led the industry in helping renters build credit history, and with the latest collaboration with ClearNow, we are achieving another major milestone.”
While this is a beneficial additional credit building method it is important to remember that it will not overcome the negative weight of current collection accounts or being overextended. But this is a tool that can be used to help those that are current on their bills or rebuilding their credit after tackling the past bills. There is also no indication of how much weight this reported item will have on the credit score. However any positive payment performance is a good thing.
If you are renting from a private landlord or small apartment complex it may be worth bringing this to their attention to give you the flexibility of making your rental payment and helping you to rebuild credit at the same time.
ClearNow also offers additional services that are interesting as well. The service will collect seller financing mortgage payments, condo fees, and home owners association dues. It does not appear that those payments report to Experian, yet.