Paying rent can be a path to build credit. That is, as long as your rent payments are being reported to the major credit bureaus — Equifax®, Experian®, and TransUnion®. Or there are some methods of paying with a credit card which can potentially build your score. You will also need to make sure you’re regularly making on-time payments, as late or missed payments can have a negative effect on your credit.

While it may not feel as automatic as other methods, with some effort, you can use your rent payments to build your credit. Here’s a closer look at how to do so.

How Paying Rent Affects Your Credit

Paying rent has the potential to affect your credit in two major ways: through your traditional credit history or through alternative data.

•  If you use your credit card to make rental payments, then your account activity will get included in your credit report. If you’re making timely payments in full, then this can positively impact your credit score. Late or missed payments, on the other hand, can lead to negative effects on your credit score.

•  Alternative data refers to sources that are not typically used to calculate credit scores. However, some lenders may consider them to determine creditworthiness. Rental payments are one example of alternative data — though for this information to count, you’ll usually have to enroll in a rent reporting service. And again, in order to build your credit through rental payments, it’s necessary to make those payments on time.

Can Your Rent Payments Appear on Your Credit Report?

Rent payments can appear on your credit report if your payment activity is reported to the major credit bureaus. To find out if your rent gets reported, ask your landlord or the property management company.

Your method of payment also affects whether your rental payments will show up on your credit report. For example, if you’re able to pay rent with a credit card, your payment should show up on your credit report. However, if you pay with a check or bank transfer, your payment most likely will not appear on your credit report.

Can You Manually Report Rent Payments to Credit Bureaus?

Unfortunately, you can’t report your rent payments to the credit bureaus on your own. Your landlord usually won’t be able to either, unless your building is managed by a property management company that does.

The good news is that there is a workaround to getting your rent payments reported, but it involves using a rent reporting service.

Tips for Getting Credit for the Rent You Pay

There are two main ways to get your payment activity added to your credit report: enrolling in a rent reporting service or using a method of payment that’s guaranteed to show up on your credit report.

Sign Up for a Rent Reporting Service

You can sign up for a rent reporting service yourself, or you can ask your landlord to do so if you’re hoping to use your rent payments to establish credit. If you sign up yourself, you may have to go through some verification procedures, such as having your landlord verify your rent payments.

In most cases, you’ll pay a fee for using the service. You may pay a set-up fee only, or you could owe a monthly fee. If your landlord signs up, they could incur a fee that they may then pass onto you. Still, it could be worth it if you want your rent payments reported to the credit bureaus.

Use Your Credit Card

If your landlord or property management company accepts this method of payment, then using your credit card could get your rent payment put on your credit report. Keep in mind that like rent reporting services, you may be charged a processing or convenience fee for using your card to pay for rent.

Also know that, while there are different types of credit cards, many charge high interest. Make sure you can pay off your bill for your rent promptly; otherwise you could wind up with high-interest credit card debt.

Recommended: What Is a Charge Card?

Does Missing Rent Hurt Your Credit Score?

Missing even one payment could affect your credit score negatively if your rent payments are reported to the credit bureaus. Considering that payment activity is one of the major factors used in calculating your credit score — your payment history makes up 35% of your FICO® score — it’s best to try and make on-time payments each month.

However, if you don’t use your credit card to make rental payments, you aren’t signed up for a rent reporting service, and your landlord doesn’t report your payment activity, then your credit score will most likely not be affected by missing rent. Still, missing rent payments can have other serious implications down the road, from making it harder to negotiate rent in the future to possible eviction.

Other Ways to Build Credit

While paying rent can build credit, there are other ways to go about doing so. If you’re hoping to establish your credit, here are some alternatives to consider.

Take Out a Personal Loan

Here are two options:

•  There are many loans that are specifically geared toward those looking to build their credit. Sometimes marketed as credit-builder loans, these loans approve you for a specific amount that you then make payments on in monthly installments until the amount is paid off in full.

  Unlike a traditional personal loan, the money borrowed is held in a savings or escrow account — think of it as forced savings — and your payment activity is reported to the credit bureaus. Once you pay off the loan, you’ll receive the funds, minus any applicable fees.

•  You can also choose to take out a traditional personal loan, where you’ll receive a lump sum upfront. The amount you qualify for and the terms of the loan will depend on your creditworthiness. In fact, if you’re in a bind and have strong credit, you can even use personal loans for rent.

With either of these options, make sure to shop around for lenders and compare offers. Also take the time to read the fine print carefully, so you understand exactly what you’re getting into.

Become an Authorized User

Another option to build credit is to ask someone you trust — such as your spouse or a relative — who has good credit to make you an authorized user on their credit card. Doing so means that this account gets added to your credit history.

This can allow the primary cardholder’s credit activity to help you build your credit, as long as they continue to be responsible with their credit card. In turn, this could help you to secure the necessary credit score to rent an apartment or qualify for loans.

Use a Credit Card

Another way to build credit is through responsible credit card usage. Depending on your credit history, you can choose from a secured or unsecured credit card. A secured credit card may be easier to qualify for, since many are geared toward those with limited or no credit history. You’ll need to put down collateral (usually a refundable deposit), which will serve as your credit limit.

Or, you can try to apply for an unsecured credit card if you believe your approval changes are high.

Whichever route you go, make sure to stay on top of making your payments on time, and avoid using too much of your available credit limit. You could even consider paying your bills with a credit card to build up your payment history.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

The Takeaway

You can build credit with your rent payments if you make them using your credit card or if your payments get reported to the credit bureaus. Ask your landlord or rental company if payments already get reported to the bureaus. If they don’t you can sign up for a rent reporting service, though you’ll most likely pay a fee to do so. From there, rent can affect your credit score positively or negatively, depending on whether your payments are made on time.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How soon will my rent payments appear on my credit report?

Typically, credit reports are updated monthly. That said, how soon your rent payments will appear on your credit report depends on several factors, including when you made your payment, how you paid, and whether you did so through a credit reporting service.

Can I build my credit by paying rent?

You may be able to build your credit by paying rent if you use a method of payment that gets reported to the credit bureaus or if you sign up for a rent reporting service. Otherwise, if your landlord or property management company doesn’t report your payment activity, it won’t affect your credit.

How long does unpaid rent stay on credit?

If you missed a rent payment and your rent payments do get reported to the credit bureaus, the negative remark may stay on your credit report for up to seven years.

Photo credit: iStock/miniseries

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

SOCC-Q424-006

Are Checking and Savings Accounts Assets?

Checking accounts and savings accounts are typically considered assets, since they have a positive financial value. They represent accessible money that is part of your personal wealth and can be used as you like. Other types of bank accounts, including certificates of deposit (CDs) or money market accounts, are also assets.
Knowing what kind of assets you have, including checking and savings accounts, can make it easier to calculate your net worth. Learn more about how your bank accounts and assets work.

What Is an Asset?

An asset is something you own that has intrinsic value. Examples of assets can include bank accounts, cash, a home or other real estate, vehicles, retirement accounts, and brokerage accounts. In addition, assets can include art, antiques, jewelry, and other objects of value.

Some assets can rise in value over time.

•   For instance, real estate can appreciate or grow in value over time.

•   Similarly, as you earn interest on your savings account, your wealth can increase. Or if you get a bonus at work and deposit it, that too can build your net worth.

Assets may also diminish or lose value over time.

•   For example, if you had $20,000 in your emergency fund but have to withdraw $10,000 for major dental work, that asset has decreased. You still have $10,000 in the account, but that’s less than you previously had in the plus column, financially speaking.

•   Stocks can also lose value due to shifting economic and other forces. So, a stock you paid $100 per share for yesterday might be worth $75 per share tomorrow.

However, as long as your savings account has a positive balance and those stocks have some value, they’re still considered to be an asset.

Assets vs Liabilities

Assets are one part of the equation when you’re calculating net worth. Your net worth is a measure of what you own versus what you owe. To find your net worth, you’d subtract your liabilities or debts from your assets.

•   When your net worth is positive, that means you have more assets than debts. When net worth is zero, it means your assets and liabilities are equal to one another. Effectively, they cancel each other out.

•   Can you have a negative net worth? Certainly, if your debts exceed your assets. For instance, if your only assets are $5,000 in a checking account and $10,000 in a savings account but you owe $40,000 in student loan debt, your net worth would be -$25,000 at this moment in your life.

Keep in mind that it takes time to build wealth. Assets tend to accumulate over time (say, as savings in your retirement account grow), so don’t be discouraged if you are early in your career and in negative net worth territory.

How Are Assets Categorized?

There are different ways to group assets, depending on the context in which you’re discussing them. You can think of assets in terms of liquidity.

•   Liquid assets are ones that can easily be converted to cash. For instance, if you have $10,000 in your savings account, you could quickly access those funds in a variety of ways (electronic transfer, for instance). If you own 100 shares of stock, you could sell them for cash.

•   Illiquid assets, on the other hand, are ones that can’t easily be sold for cash. Real estate is an example of an illiquid asset, since it can take time to find a buyer and complete the sale. Your grandmother’s diamond engagement ring, which might be sitting in a safe deposit box, is another example. While it has value, it would likely take some time to have it appraised and find the right buyer.

In business and accounting, assets can also be categorized as tangible or intangible.

•   Tangible assets are things that you can physically see and touch. If you own a restaurant, for example, then kitchen equipment is a tangible asset. (If someone were to ask you if you had tangible assets, they might be referring to, say, artwork or jewelry.)

•   Intangible assets include things like trademarks, patents, and copyrights. You might also think of intangible assets as intellectual property, or IP.

In addition, if you are talking about investments, you might group assets into such categories as stocks, bonds, commodities, and other categories.

Recommended: Explaining the Different Types of Asset Classes

Is a Savings Account an Asset?

A savings account is an asset since it has financial value and is something you own, not something you owe money to (which would be what’s known as a liability). That’s true, regardless of whether you have $5 in your savings account or $500,000.

Savings accounts are secure places to keep assets that you can access fairly easily. If you’re saving in a bank that is insured by the Federal Deposit Insurance Corporation, or FDIC — and most banks are — then your deposits are insured up to $250,000 per depositor, per ownership category, per insured institution. Credit unions typically offer similar coverage via the National Credit Union Administration (NCUA).

Depending on where you choose to keep your savings, you could also earn a competitive interest rate (expressed as annual percentage yield, or APY, which reflects the power of compounding interest) on deposits.

Different savings account types include:

•   Basic or standard savings accounts

•   High-yield savings accounts, which can offer as much as several times the interest rate that standard savings accounts deliver

•   Money market accounts, which combine the features of checking and savings accounts

A CD can also be considered a savings account, but it works somewhat differently. Rather than allowing you to dip into savings whenever you like, CDs are term deposits, meaning they have a set maturity date at which you can either withdraw or roll over the funds. Taking money out before the maturity date typically triggers an early withdrawal penalty.

Recommended: How to Switch Banks

Is a Checking Account an Asset?

A checking account is an asset, just like a savings account. The main difference between a checking account and a savings account is how they’re meant to be used.

•   Checking accounts are designed for spending. You can use a checking account to pay bills online, transfer funds to friends and family, or make purchases using a linked debit card. Unlike savings accounts, checking accounts typically don’t earn interest, though some may earn a small amount. But it’s for this reason that you probably don’t want too much cash just sitting in a checking account. Moving some of the funds to a savings account could help your money grow into an even bigger asset.

•   Savings accounts are designed to hold money that you don’t plan to spend right away. You might use a savings account to stockpile your emergency fund or set aside money for an important short-term goal, like buying a new car or paying for a wedding. Because the money typically sits in a savings account for a while, the depositor is rewarded with interest.

You can keep your checking account and savings account at the same bank for convenience. However, if you’re using a brick-and-mortar bank for checking, you might get more bang for your buck by keeping your savings account at an online bank. Online banks typically pay higher rates to savers than traditional banks.

Checking and Savings Accounts on a Balance Sheet

Here’s an overview of how your banking assets can be viewed in a business context. Businesses use a balance sheet to see at a glance how much money is moving in and out. Checking and savings accounts can be included on a balance sheet and are usually listed under “current asset, cash.”

A balance sheet is intended to capture how a business’s assets compare to its liabilities over a specific time period. Businesses can use balance sheets to get an idea of how financially healthy they are. When applying for loans, lenders may ask to see an up-to-date balance sheet, along with a profit and loss statement or cash flow statement.

The Takeaway

Understanding that checking and savings accounts are assets can be an important step in building your financial literacy. What’s more, recognizing that these bank accounts add to your net worth can help you make smarter decisions with your money. One of those decisions centers on where to keep your bank accounts.

If you’re interested in helping the money in your bank accounts grow, then SoFi could be a great fit.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What kind of asset is a savings account?

A savings account is a liquid asset, since you can easily tap into the cash in your account if needed. Savings accounts offer a convenient way to set aside money for emergencies or other goals, while earning some interest in the process. These assets can contribute to your net worth calculations, along with your other assets.

Is your savings account a liability?

A savings account is an asset (meaning it contributes to your net worth and personal wealth), not a liability, which is an obligation to pay another party. The only way that a savings account could become a liability is if you were to overdraw your account. In that case, you would need to make a deposit to bring your account balance to or above zero.

Is a savings account an asset or equity?

Savings accounts are assets since you own the money in them outright. (Also, if you’re wondering, a checking account is an asset, too.) Equity is a term you’ll hear when talking about investing. For example, when you buy a share of stock you’re getting equity, or an ownership stake, in the company.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.