Bankruptcy Filers Can Now Use Rental History to Rebuild Credit

 Posted on November 18, 2014 in Bankruptcy

When a person files for bankruptcy, it takes time for their credit history to “heal” from the painful ordeal of overwhelming debt that caused the bankruptcy filing. As long as person is careful not to overextend themselves, they are usually able to qualify for credit cards, auto loans and even mortgages within several years of filing.

Having taken control of their debt and filing for bankruptcy, a person can also take control of their credit history. Applying for a secured credit card and making the payments on time every month, as well as any other accounts that were not charged off in the bankruptcy, such as a mortgage or auto loan, will increase a person’s credit score enough that they may be able to qualify for unsecured credit within two years following the bankruptcy.

There is now a new way for people to help increase those credit scores and that is with their rental history. In the past, a person’s rental history was never included on credit history reports. If a person has a long history of making on-time rental payments, they never received the credit benefit for that good history like a person who pays their mortgage on-time.

But now, two of the major credit reporting companies, Experian and TransUnion, have begun accepting and including verified rental history information on credit reports. TransUnion has conducted several studies that show the increase in credit scores rental payment history can make. In one study, when just one month of rental payments were incorporated in a person’s credit history, the average score rose by 10 points in 20 percent of the consumers.

Renters will not be allowed to self-report their rental history. It needs to be done through the landlord, who can either do it through TransUnion’s Resident Credit program or through third-party companies who take a renter’s payment online and send the payment to the landlord, as well as report the payment to the credit bureaus.

If you are struggling with debt problems due to unforeseen circumstances, but are concerned with how bankruptcy may affect your future, consult with an experienced San Antonio bankruptcy attorney today.