Credit reporting agency Experian is now incorporating positive rental data from its RentBureau division into the traditional credit file.
Reporting rental data is a voluntary service which allows an estimated 50 million tenants with little or no credit–which can include everyone from college students and recent graduates to immigrants, new avenue to build credit with continuous on-time rental payments.
Given that one-third of the U.S. population rents, we felt it was imperative to reflect the true creditworthiness of those individuals who responsibly pay their rent, said Brannan Johnston, vice president and managing director, Experian RentBureau. Our research shows that over one in three consumers how credit customers will improve to at least the next score band with the addition of positive rental data from RentBureau.
According to the National Multi Housing Council, there are nearly 96 million individuals currently renting who are not getting the credit they deserve based on their credit reports. In the past, on-time rental payments did nothing to boost a credit score. Positive rental history will now help many renters who are looking for ways to rebuild their credit scores due to financial hardships such as a foreclosure or a bankruptcy. In the past, only a subset of negative rental activity was reported. Moving forward, continuous rental payments can be leveraged by consumers to qualify not only for new leases, but also for other financial products.
There is also a benefit to lenders with the addition of rental payment data. Lenders can now update their underwriting procedures to automatically capture a consumer rental payment obligations from the credit report and eliminate the need for costly, time consuming manual entry. Additionally, lenders will now have a comprehensive understanding of a consumer total monthly obligations to assist with offering credit to emerging consumers.
Experian acquired RentBureau multifamily division in June 2010. RentBureau is the largest and most widely used credit bureau for the multifamily industry. RentBureau database receives rental payment histories every 24 hours from its national network of property management companies, which currently includes more than 8 million residents nationwide. Members of this network contribute their rental data to RentBureau directly and automatically from their property management software. In return, members receive immediate, centrally stored, integrated verification of new rental applicants payment history as part of their existing resident screening services.
American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, including rental forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.