Reporting Apartment Rent Payments Takes on Greater Meaning, Value
Residents more often pay on time and seek communities that enable rent reporting.
Reporting renter payment history to consumer reporting agencies (CRAs) has occurred for decades. But recently, renter payment reporting has received fresh attention.
With additional focus in recent years shifting to ensuring equitable outcomes for all Americans, implementing rent reporting practices that work for both renters and housing operators is one way to make sure resident populations don’t get left behind.
“Apartment operators have shown some reluctance to provide this because it’s hard to do and it’s not been a business priority,” according to Nancy Crouch Morlini, AAP, Senior Vice President, Transactional Services, RealPage.
“However, renters are more likely to pay their rent on time if they knew they were building their credit scores by doing so.”
Crouch Morlini was speaking as part of a presentation at the National Multifamily Housing Council (NMHC) OpTech Conference Nov. 1 in Las Vegas. NMHC recently released a white paper about how rental reporting benefits operators and residents.
Reporting Spurs More On-Time Rent Payment
Data show that 77% of renters said they would be more likely to pay rent on time if it were reported to credit bureaus and 67% of renters will choose an apartment that offers rent reporting over one that does not.
Launched in September 2022, RealPage Rent Reporting is a monthly subscription that helps residents build their credit profiles by automatically reporting monthly rent payment activity to Equifax, Experian, and TransUnion. Reporting is automated – with no administrative effort required by property managers. Consumers sign up during the leasing process or from the community’s resident portal.
There is no cost, no training or implementation. Resident support is provided.
Reporting rent payments automatically to all three credit bureaus is extremely beneficial because one in 10 adults and half of residents ages 18 to 24 are credit invisible, Crouch Morlini said.
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Delivering the Benefits of Credit History to Renter Population
In its newly released white paper report, “Renter Payment Reporting: Considerations for Rental Housing Operator,” National Multifamily Housing Council (NMHC) informs the industry that new statutes and regulatory activity encourages it, new research documents its benefits to disadvantaged groups, and provider innovations have created new approaches for rental housing operators and renters to consider.
NMHC told the Senate Banking Committee leadership during a 2018 Congressional hearing, “Apartment owners and operators have long called for policymakers and the consumer reporting industry, together, to better enable our nation’s renters’ ability to build a financial profile that allows them to attain the many benefits that come with it.”
NMHC’s call for broader adoption of rental payment data goes beyond its impact on mortgages; it can also help renters build a more comprehensive financial profile which can increase their access to better terms for consumer products ranging from auto loans to insurance to cell phone plans.
Helping to Kickstart a Renters’ Financial Profile
Report author Jay Harris, Esq., is a Principal Attorney with Harris Crystal Advisors. He writes that renter payment history reporting presents great opportunity for both operators and renters.
“For renters, they can kickstart an individual’s financial profile and help them secure other credit opportunities. This in, turn, creates more equitable outcomes for our resident populations and helps improve their economic mobility and household affordability.
“The programs also provide rental housing operators access to lease-relevant insight to inform rental applicant risk assessments. As such, multifamily operators are increasingly (re-)considering their role in renter payment reporting for several reasons. Some operators see marketing benefits in helping renters get better credit terms based on their renter experience.”
Harris said that others recognize that facilitating rent reporting benefits the company’s social and inclusion goals, since it often gives traditionally marginalized renter populations a fairer shake.
Additionally, “new product innovations are making rent reporting easier for property managers to implement and reliably sustain. Rent reporting also matters to multifamily operators because it is being brought to their door.
GSEs Incentivizing Borrowers Who Report Rent Payments
Importantly, the Government Sponsored Enterprises (GSEs) are offering incentives to multifamily borrowers that agree to reporting renter payment history.
“Consumers are also asking for rent reporting that works and shows up in improved terms on car, credit card, and mortgage loan offers,” according to the report.
For many reasons, picking the right approach to rent reporting – one that balances risk, can be done within staff constraints and ensures a good customer experience–matters to today’s property managers, according to NMHC.
“Fortunately for housing providers and renters, this space is ripe with innovation and potential,” Harris said.”