November 7, 2013
How would you feel if I told you that you could be improving your credit score right now? Well, I mean, obviously there are several ways that one could possibly improve a credit score – literally at any given moment – but those things might require a little bit of work and tweaks in your spending habits. What if I told you that you could be improving your credit score, at this very moment, with no additional effort on your part? This is a thing, guys! And all you have to do is this: pay your rent.
Rental Kharma is a startup that helps both consumers and businesses build their credit simply by reporting their rent payments to the credit bureaus. Paying rent is obviously something that most of us already do on a regular basis anyway, but our timely rent payment history isn’t something that’s included in our credit report. Rental Kharma provides a simple and affordable way to verify past rent payments and have such payments count toward developing our credit score.
Offering rental history reporting to both consumers and businesses, Rental Kharma hopes to offer something that really hasn’t been a focus in the credit industry. “There’s still a lot of innovation to be had in the credit industry. Many of the policies and procedures are the same ones that were used in the 1970s and 1980s,” says Bill Butler, one of the company’s co-founders.
It’s not entirely a new concept, though – building credit through on-time rental payments. In December of 2010, credit-reporting company Experian started including rent-payment history in its credit reports. Through Experian’s RentBureau, rental histories are collected from property management companies, which are then factored into the credit score used by Experian. For the most part, though, this rental payment history is not accounted for; when it is factored into formulating credit scores, it’s always in cases of negative effect (when renters fail to pay their rent on a timely basis or outright). Rental Kharma aims to change that.
There is competition in this space, with companies like WilliamPaid, Rent Reporters, and Ecredible having already offered similar services to consumers. What makes Rental Kharma so great, though, is 1.) it’s the only company that offers businesses this service, and 2.) it’s a significantly cheaper option for consumers, with a $10 annual fee for the consumer product. For $10, why wouldn’t you use Rental Kharma? Especially, when you take into consideration the possibility of increasing one’s credit score by at least 100 points with absolutely no changes in spending habits – that’s certainly a win-win, right?
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