Rent suddenly reported as installment loan.

[Anonymous]

When I checked my credit for the first time this year today, I noticed that our management started reporting my rental agreement as an installment loan. I suddenly have a big outstanding balance, oh joy.

Then I noticed that they actually report it as my oldest trade line, which is nearly one year older than my oldest credit card. That helps quite a bit with my otherwise puny AAoA and extends my credit file.

So I am not quite sure at the moment whether it's time to rage or be happy about this.

[MarineVietVet]

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@Anonymous wrote:

When I checked my credit for the first time this year today, I noticed that our management started reporting my rental agreement as an installment loan. I suddenly have a big outstanding balance, oh joy.

Then I noticed that they actually report it as my oldest trade line, which is nearly one year older than my oldest credit card. That helps quite a bit with my otherwise puny AAoA and extends my credit file.

So I am not quite sure at the moment whether it's time to rage or be happy about this.

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How much balance are you talking about?

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

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@MarineVietVet wrote:

How much balance are you talking about?

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Well, I'm roughly in the middle of my 12 month contract, so it's about $5,200. The monthly payment that they report is much higher than I actually have to pay (they use the basic rent of a month-to-month contract), which sucks.

[MarineVietVet]

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@Anonymous wrote:

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Well, I'm roughly in the middle of my 12 month contract, so it's about $5,200. The monthly payment that they report is much higher than I actually have to pay (they use the basic rent of a month-to-month contract), which sucks.

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I see. Have you asked them what made this suddenly appear after 6 months?

But this might be a good thing if it helps your AAoA. You'll have to run the numbers and see if it's worth leaving it as is.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

I haven't asked them why  they suddenly do this (I actually just saw this on my report), but heard that this has been common in the Northwest for years. They might have just started this in Arizona in 2011.

At the moment, I only see it on Experian, so I don't know how this will affect my FICO score. My FAKO hardly changed, but I had also an inquiry fall off, so who knows.

Edit: I also had my new Target card report for the first time, so I cannot really tell what the effect of the rental account alone is.

[Lel]

Interesting.  I don't recall anyone else mentioning this before.

In general, the balance on installment loans don't have a significant impact on FICO scores - which is a good thing, because this would mean that anyone who gets a mortgage, auto loan, or student loan who see a big drop in scores.

It seems like this could be a positive thing in the long run, so long as you don't miss any payments.  I think there might be many people who would love to have their rent report regularly, because then they would have clear documentation on their credit reports of this positive (alternative) trade line.

Not to throw some cold water on the situation, but is the rental company also reporting the amount that you actually pay each month?  If they are, and since the scheduled payment is much higher than it really is, I wonder if this could be a problem for either your EX FICO score or when a prospective creditor looks at your report.

[Anonymous]

Okay, this is how it reports:

Account Name: EDC/MEB

Account #: XXXX

Account Type: Rental Agreement

Balance: $5,915.00

Past Due:

Date Opened: 5/1/2003

Account Status: Open

Mo. Payment: $845

Payment Status: Current

High Balance:

Limit:

Terms: 12 Months

My actual monthly payment is much lower, but doesn't show up here.

[haulingthescoreup]

Well, fwiw, installment util doesn't affect FICO scores much. It might well be that suddenly having an older account makes it a net gain.

Awfully weird, though. Just when I think I've heard everything!

[Lel]

Since they're not reporting your payment amount, and list as current, then I'd have to believe that this would be a net positive for you.

[Anonymous]

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@Lel wrote:

Since they're not reporting your payment amount, and list as current, then I'd have to believe that this would be a net positive for you.

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Well, they are reporting a fictitious payment amount, those $845. But even here I'm not sure whether that's good or bad that they report more than I actually pay. I guess it would be bad if I applied for an auto loan, as I seem to have less of my salary left than I actually do. On the other hand, it might look good during a mortgage application, as the mortgage would replace that payment.