How to report your rental history
As we said, you can start by contacting your landlord and credit bureaus. However, you can also look into services that exist solely to ensure that your rental history is part of your credit score. The most prominent of these are Plastik and Rentmula. Although these services will likely help your credit score, you should know that they are not free. They take a small cut of each payment, usually around 2 to 3%. This may not sound like a lot, but it can quickly add up to thousands of dollars each year.
Thank you for reading this post, don't forget to subscribe!Are these services worth it? As we’ve said many times before here on WalletGenius, the answer is “it depends.” If your credit score needs improvement, it may be worth it in the short term. However, you must remember that once your desired credit score (or financial goal) is met, you should eventually stop paying for these services.
When will these new rules start?
Fannie Mae announced that they will begin considering rental history on September 18, 2021. The process is mostly automated, which means your rental history will automatically be included in their acceptance/rejection calculations. Of course, this assumes that they can find it. So be sure to ask about making sure your rental history is considered on your next mortgage application.
It’s worth pointing out that Fannie Mae doesn’t manage the loans themselves. Their system approves potential borrowers, who are then passed on to private lenders.
what should you do?
If you’re on the verge of applying for a mortgage after living in a rental for years, you might want to wait a month. After September 18, you’re more likely to be approved if you can include years of consistent rent payments as part of your mortgage application. You can also get more favorable interest rates if your credit score improves through this process.
If one of your mortgage applications has been declined recently, don’t be discouraged. Take the time to link your rental history to your credit score. Then, try reapplying after September 18 (or wait a few months to be safe). Once the banks see that you are able to handle all the rent payments over the years, you can be sanctioned next time.
