Posted by Chuck on May 25, 2018
Consumer Credit

Published on May 25th, 2018 | by Chuck

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Help Build your Credit Score for Free with the Pinch Rent Payment App

The Pinch app is a rent payment program which can help strengthen your credit score by having rent payments recorded on your credit report as an installment loan (similar to a car or mortgage loan). Simply pay your rent payments as usual and submit proof of payment to Pinch who will then have your credit report reflect the payment. This can potentially increase your credit score.

The site is primarily targeting those who are underbanked and don’t have much credit history. But I think many of us can gain from this in a real way: 10% of your FICO score is based on your credit mix. A healthy mix of revolving credit lines (e.g. credit cards) and installment loans (e.g. mortgage or car loan) can give a real boost to your credit.

We once wrote about the Shared Secure Loan installment loan trick. I did that trick myself and saw a solid 50-60 point jump in credit score a few months later which I attribute to the installment loan (my score jumped from around 760 to around 820). That trick still works in theory, but in practice we don’t know which bank or credit union to use to get it to work since Alliant stopped allowing it (though it’s possible to do the same trick with a non-secured loan and swallow the hard pull or do the trick with other banks).

As far as I can tell, this Pinch app should have the same affect as the Shared Secure Loan trick since it adds an installment loan to your credit mix. It’s not too useful for someone who has a current mortgage, car loan, or other type of installment loan, but if you only have revolving credit from credit cards, the Pinch app might be able to give your score a significant boost. And, of course, Pinch can also be extremely helpful for a credit newbie or someone trying to rehabilitate their credit.

Update: As mentioned by some readers in the comments, it seems these rent payments will only help your score with the FICO 9 scoring model. Most banks use FICO 8 or earlier model (and that doesn’t seem to be changing any time soon) so this trick won’t really help your score, currently, to get a typical mortgage or credit card. 🙁

I also see now in the FAQ that they only report to Transunion, not to all Experian and Equifax. There is an option to get reporting to those as well, but only if you have Pinch mail the check for you, not by simply sending a picture of the check. That option may not work for a lot of people, leaving only Transunion getting reports which makes Pinch way less useful.

Pinch sounds like a fantastic route to help build credit. I don’t know how they make money, possibly from data aggregation or maybe from their paid offering for property managers. Pinch is also looking at having utilities or cell phone data reported on the credit report.

Just keep in mind that you do need to give in your name, address, DOB, and SSN, as well as your lease, to use the service. You’ll also apparently have to link your bank login so that they can verify the rent payment (I’m not sure how this works since they list money order as one of the acceptable rent payment methods, and that wouldn’t necessarily be visible in your bank login; also not sure why they can’t just use a copy of the check to verify).

If you want to buy me a coffee,  input my referral code: XX6RN – they’ll give the option to input a referral code during signup (I’ll get $10), thanks! As far as I can tell, there isn’t any bonus for the new member.

Big thanks to reader Mnml (here’s their travel website link) for letting us know about Pinch. 



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Information Booth

Wow… will tell my nephew about this… he’s looking for ways to establish a credit history… thanks Doc… may God bless you the way you bless me!!

Max
Max

>If you want to buy me a coffee, input my referral code: XX6RN – they’ll give the option to input a referral code during signup (I’ll get $10

Man that’s an expensive coffee. You could also buy DoC three pork tenderloins with that!

Tad
Tad

Hmm and this is “free”? what’s the catch?

Keith
Keith

I imagine this would decrease the score of some of us who already have a score above 800? Does it report as a new account from the time you begin this service, or the beginning of your lease originally?

P
P

I’ll try this, but not sure how they can verify rent payment even. My CU will have the check # and amount but rarely have description (whether rent, utility, etc.), and they sometimes don’t upload copies of the cashed check.

P
P

Never mind. They want a lease. I don’t have one. It’s just a month-to-month rent payment.

SJ
SJ

Do you like to provide your SSN # ???

Jay A
Jay A

I think it’s worth noting that these on-time payments are only factored into your vantagescore 3.0 score, which is what Credit Karma uses. The vast majority of lenders check FICO which does not consider rent payments, even when reported.

Louis
Louis
John
John

What’s exactly is FICO score 9?

Snorlax
Snorlax

There’s more than one FICO score, 9 is the latest, many lenders still use FICO 8, mortgage lenders use an ancient FICO, maybe FICO 4, IIRC.

Just me
Just me

There are dozens of FICO models that are weighted differently. I wouldn’t suggest that any are “ancient” or out of date. They are all products that are sold to credit lenders which differ in weighting so a lender can make their own decisions about what’s most important in a borrower without just getting a standardized “score”. Other companies make their own models to compete with FICO models, they just have less of them.

Max
Max

coffee costs $10? :p you should try with a french press.. maybe .25c in raw materials

MarcoPolo
MarcoPolo

He is not going to have it alone and at Starbucks it will cost upward of $10 for two.

Dave
Dave

A coffee was just over $2 for a medium. If you purchase one of those unhealthy blended overpriced drinks, it could be $5 easy.

AS
AS

I really wish they can be partner with Plastiq

MarcoPolo
MarcoPolo

Exactly. that way they can get our rent data and nothing else.

Chris
Chris

Does it *actually* add an Installment Loan to your credit mix though?

There are similar services available (one of which my property manager promotes and that I use) that make similar claims, however my credit report shows the reported entries as rental payments.

Scott
Scott

Trying to figure out the catch with this, or more generally how this makes business-sense for them:
– Do banks, etc., (including them) get paid by the credit bureaus for providing loan and payment information?
– If so, could the credit bureaus determine that my rent is not actually a loan and this is fraudulent reporting? Could this have legal consequences?
– Any red flags in the TOS with respect to use of personal information?

Scott
Scott

Their service has been evolving over the last several months. In a February interview, the co-founder said that the service costs $6 per month; but it’s a free service now. The recent Google Play reviews are consistently negative, most complaining that the company is taking their information but not finalizing the account registration.

MarcoPolo
MarcoPolo

Too many unknowns at this stage and I just don’t want to give my bank login and other sensitive information.
I suspect they will be collecting our banking data & selling it for their “free” service.

DrCalamari
DrCalamari

The referral link in app says “first month free”. Sounds like they will be charging for this eventually.

Anna
Anna

Doc Calamari….Your name just gave me my Smile back this morning on this Crappy overcast morning in Northern Cali.
Thanks Doc!

Asha Moore
Asha Moore

I tried it and they dont get back to you. I waited two weeks. And their customer service is shoddy.

Harry potter
Harry potter

I wouldn’t use pitch app for nothing.i check with the better business development.the informed me to stay clear.the rating is _3 ,don’t believe me check yourself.

Terri
Terri

Does this work if you have no bank account? …..my funds are added on a card and that is how I pay my rent.

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