Rent and utility bills come under the category that is known as alternative credit. All kinds of payment that are considered as alternative credit are not reported to the credit bureaus. While the nature may be similar to credit there are a few differences such as most of the times the payment being made is in advance of the service being provided. In case of utility bills usually be one month in advance of the service.
Apart from that there are other prohibited fact is that cannot allow a landlord to report the rent to the credit bureaus. Reporting data to a credit bureau requires the business of an individual to comply with all laws and policy requirements. These requirements may include making regular and accurate reports on payment and responding to disputes within the required time limit. It would also entailed using the right technology to ensure accuracy and timeliness along with a substantial investment in equipment labour and facilities. Just the subscription fees for reporting to a credit bureau might be a highly prohibitive factor to individuals such as landlords.
Some state laws also prohibits the reporting of utility payments to the credit bureaus.
Currently it is believed that information present from alternative credit transactions does not serve as a very good representation of a person’s creditworthiness. Replacing traditional credit data with alternative credit data will serve to degrade the predictability of a credit reporting system.
However this is something that is being looked into. If the method can be developed so as to include this kind of information on a credit report and involving a risk prediction, the based on this information it will help people with no credit history to make other purchases such as the house or an automobile. For now rent and other alternative credit it is not reported to the credit bureau.