Rental Kharma helps you build credit history by creating new trade lines on your credit report. You pay them a fee for their service and they report your rent to the credit bureaus. No payments are made through their company and it’s up to your landlord to verify your payments.
The service is easy to sign up for online and costs less than a secured credit card. Both work similar for building an initial credit history. If you’re recovering from bankruptcy or if you’re a thin file borrower, Rental Kharma can help you get your feet wet. You’ll be able to post something on your credit report – even without having funds ready to serve as collateral.
Rental Kharma also comes with a set of perks that help justify their enrollment fee and monthly subscription cost. You should heavily weigh this service before disregarding it, especially considering many landlords are not personally in a position to report. This side-step allows you to “be the one-percent,” and join the small list of consumers that have their rent payments listed on their credit file.
There are two pricing options that come with being a Rental Kharma member.
First, you have the standard subscription deal where you pay $25 to join and then $6.95 a month. You can add your spouse or roommate for $2 per month more – but both must individually pay the $25 enrollment fee.
Second, you have the option to submit back-rent payments. This service comes with a $5 per month fee and caps at 24 months. Likewise, there is a $25 enrollment fee. You can also submit different leases at once without paying anything extra.
Billing begins for the first month only after 60 days beyond when your lease gets confirmed. You can cancel at any time without paying a fee. There’s no contract required and you have a 100% money back guarantee.
Pros and Cons
- Gain credit history without a secured credit card
- Skip the costly fees that come with a credit builder loan
- Help you and your spouse build credit using your rent or lease
- Can Increase your credit score for 1-100 points
- Full money back guarantee if you’re not happy
- Not everyone sees a major credit score change
- It’s irrelevant for anyone with good credit
- They currently just report to one major bureau TransUnion
FINAL VERDICT – Rental Kharma provides a stellar service. It’s a solution for thin files and low credit score consumers that falls under the radar. With all the disadvantages that come with credit builder loans and secured cards, why not give it a try?
You can get your rental information verified and see if your credit score changes. If not, simply ask for a refund. There’s nothing to lose and for that reason it makes complete sense to join if this service appeals to you.
back to menu ↑
- Rental Kharma gives new borrowers and consumers with bad credit scores the chance to make a difference in their creditworthiness. Most people will put up funds to secure a credit card, and then pay an annual card fee of around $30 to $75 per year. With Rental Kharma, you can skip the hefty credit card deposit and still get the same credit score building results.
- Their service comes in at a lower cost than most competing rent reporting businesses. For example, the enrollment fee at RentReporters.com is $45.95 and then you have your $9.95 monthly charge. This equates to $165.35 for your first year – Rental Kharma cost $108.40 in year one, which is $56.95 cheaper for you
- It pays to refer friends to their site. You will receive six months of membership for free if someone signs up and lists you as their referrer. This is more than $40 in monthly payments saved on your end.
back to menu ↑
In our opinion, rent reporting sites are an overlooked gem when first trying to build credit or if attempting to repair credit rating damage. You might not see your FICO score go up by 200 points overnight. However, by reporting back-rent you could easily notice a favorable adjustment. Some reviews even claim their credit score went up by more than 75 points after their rental payments were added to their TransUnion file.
That’s great. Now, here’s the inherent problem. Your rental payments will only be placed on your TransUnion credit report. You cannot force the other credit bureaus to add this payment information. Therefore, only your TransUnion credit rating will see a sizable change from the addition of your rental payment history.
That said, you can apply to credit card issuers that will pull your TransUnion file when your score goes up. Think of Rental Kharma as a way to get your foot in the door and obtain credit opportunities that would otherwise be unavailable. It’s a stepping stone in the right direction, not your shortcut to your destination.
In our opinion, rent reporting sites are an overlooked gem when first trying to build credit or if attempting to repair credit rating damage. You might not see your FICO score go up by 200 points overnight. However, by reporting back-rent you could easily notice a favorable adjustment from 1-100 points. Some reviews even claim their credit score went up by more than 75 points after their rental payments were added to their TransUnion file.