The big difference between renters and homeowners is that homeowners don’t have to worry about their paid bills being part of their credit reports. On the other hand, for those who pay rent for their home, it is not so easy. There must be an intermediary between the bank and the registry of the payment of your rent and services so it can benefit your credit score. This is where LevelCredit comes into play. LevelCredit is a rental reporting service that is responsible for improving this situation for tenants. Basically, LevelCredit offers a way to create a positive rental payment record in the credit reports needed to calculate scores, which can then work to qualify for loans, credits, or mortgages.
How Does LevelCredit Work?
LevelCredit promises that it will help you to generate good credit without getting into debt because the credit is generated and improved when you pay your rent and public services.
LevelCredit’s main job is to identify rental payments from a linked financial account and report them to one of the major credit bureaus: Equifax and TransUnion. It also offers to report your utility payments, but only to TransUnion.
The price for the LevelCredit service is currently $6.95 per month.
Within the platform, there is a dashboard where subscribers can view their credit score and reporting information, as well as get personalized advice on how to build credit. Sometimes these digital platforms are a little scary at first because it is about your economy.
But in this case, LevelCredit has security at the bank level to encrypt your financial information.
How to know if LevelCredit is for you
LevelCredit adjusts to different cases and situations, but in a nutshell, LevelCredit is ideal for those people who pay their rent through their bank account, Paypal, Zelle, the online payment portal, or direct deposit and at the same time need to improve their credit.
You may need a credit card or a loan, but your credit score is not in your favor. And establishing good credit by fulfilling something as every day as paying your rent or your services can be convenient in these cases.
Levelcredit can also be a good option for you in case you want to generate credit without using a credit card or asking for a loan.
How to know if LevelCredit is NOT for you
LevelCredit can be very valuable to people who really need it. But in the same way, it can also be useless to others. For example, for those who already have established credit. You also won’t need this platform if:
- You already asked for a loan or credit card and it was granted, surely your credit score is not bad at all. In this case, you really don’t need to use LevelCredit.
- You are not comfortable with the fact that you have to link a bank account to the service so that it can search for payments.
- You already have some other service that improves your credit little by little.
As you can see, there are opportunities where you don’t need Levelcredit, and you should get it since it could lower your credit score over time if you have well-established credit.
How to evaluate your service?
First of all, you must be sure that your rental reports are convenient for you. You can check the last 6 months or a year of rent and compare it with that of obtaining a secured credit card or a credit loan.
In most cases, these services report your payment to one of the three major credit reporting agencies. In the case of LevelCredit, report the rental payment to Equifax and TransUnion and the payment of public services only to TransUnion.
If you want to apply for a credit card or loan but using Experian, unfortunately, the payments tracked by LevelCredit will not appear.
LevelCredit has some specialized functions such as access to credit scores, personalized advice, and information on credit reports. All of these features are offered free from credit cards and personal finance websites.
Since Experian does not receive rental payment reports from LevelCredit, it has other alternatives such as Boost. Boost offers consumers a way for utility payments to be considered in their FICO scores through this platform.
What to consider if you are going to hire a rental reporting agency
What is the total fee for the service, including installation costs, etc?
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- Do you have a security system to protect my personal data?
- To which of the three major credit reporting agencies do you report rent and utility payments? (If they report at 3, it is perfect, so you do not have to feel worried about where your credit is verified and your payments are shown).
- Can I access credit scores for free?
- How long should I wait for the information to appear on my credit report?
- What are the ways to cancel the service?
These questions are important to always keep a clear control of how your finances and your private data are handled because remember that if any of your financial data is altered you could suffer great consequences.
Finally, we must clarify a frequent doubt when using LevelCredit…
What happens if you don't pay your rent or utility bill on time?
Remember that LevelCredit has an automated system, which means that if for some reason the system does not find your corresponding payment, it is clear that your credit will be affected.
But if you always keep your payments up to date and are punctual with your debts, certainly, you will not have any type of problem, and perhaps your credit can improve exponentially.
