Let’s face it, as a property manager you have a couple of primary goals: Keep vacancies low and make sure you’re renting to great tenants. Unfortunately, no matter what you do, not all of the people who want to rent from you will end up being great tenants. You can screen them, interview them, even check their credit—but there’s a problem. Their rental payment history, which would be a great predictor of potential problems, is rarely if ever, included in their credit history.
You can change that.
In recent years, the credit bureaus have opened up the option to report rental payments as an additional way to measure creditworthiness. As a landlord or property manager, wouldn’t it be great to be able to see that the last few years of rental payments were on time? Wouldn’t it be great to see any delinquencies and at the very least be able to ask about them during an interview? Wouldn’t it be great to know if they still owed money to a previous landlord? At least you’d know something about their history of actually paying the rent. Granted, seeing that they pay other bills on time—or don’t, might help you as you’re deciding who to rent to…or who not to…But the one thing that matters to you, probably more than anything else, is being able to count on that rent being paid on time, month in and month out.
And it’s easy to do.
In order for rental payment data to be available to you in a credit screening, somebody has to report it. The good news is: you can, and it’s easier than you think.
Manage your properties.
Rental Payment Reporting (RPR) provides owners, landlords and property managers with a program that motivates residents who might otherwise pay late to prioritize their rent payment.
At the same time this program will increase your net operating income by decreasing delinquencies and collection costs. In some instances, we have been able to decrease delinquency from 8.7 to 2.7%. The RPR program can also help you reduce current costs of collections because the individual’s record is already being reported to the bureau.
Reporting rental payments helps improve the way property managers reduce the risk of leasing to a risky tenant by making it easier to identify high-quality residents. Not only are payments reported, on-time or late, but also if someone moved out with money owing. As someone who may have already rented to a less than great tenant, wouldn’t you have liked to have some visibility into their last few years of rental history?
This is all fine and good. Anytime you can reduce costs and increase revenue makes great business sense. Now, what if you could frame it up in such a way that your residents looked at it as a positive thing? Well you can…
Your residents will love the program too because it helps them build credit.
Typically, within less than a month of reporting rent payments, your residents see a 20-80 point increase in their score. For them, that could translate into a lower interest rate on a credit card or an auto loan. All for reporting a payment they’re already making—their rent. I’m not sure how familiar you are with the credit bureaus or how credit scores work, but here’s the thing…There aren’t very many things a consumer can do to bump up their credit scores by 20-80 points in a month. Typically, a credit repair program or specialist is going to take 3-6 months or longer—and could cost hundreds or even thousands of dollars.
Over 100 million Americans struggle with their credit. Some have no credit and most often are denied access to traditional financial products. Rental Payment Reporting was founded to address this huge problem and provide a sustainable and simple way for renters to establish and build credit history through their largest monthly payment—their rent. We work with owners, landlords and property managers to report these payments on a monthly basis. For those who are paying their rent on time, they will see a positive impact on their credit scores.
As a property manager offering this service to your residents you will look like a hero. You’ll be helping them build credit (and save money) for pennies on the dollar when compared to other alternatives—and you’ll be making your job easier when it comes to managing delinquencies and collections.
Find out more at www.rentalpaymentreporting.com or contact Dave Haldi at 888-657-2484 and mention that you’re an AAOA member!
Dave Haldi is CEO of Trade Line Credit Solutions. The company’s Rental Payment Reporting service gives property owners and managers a new tool to incentive timely rent payments, while helping residents build credit.