Renters who need to build their credit histories are getting a leg up from a major consumer credit reporting agency.
Experian is now incorporating rental-payment history data from its recently acquired RentBureau unit into its traditional credit file, which it says will make it easier for college students, recent graduates and immigrants to boost their credit scores — if they pay their rent on time. Typically, credit reports include payment history on credit cards, mortgages, retail accounts, installment loans and finance company accounts.
Experian’s move comes at a good time, with the U.S. homeowner rate falling to its lowest level since 1998. It was 66.5 percent in the fourth quarter, according to the U.S. Census Bureau. That’s 0.7 percentage points lower than the fourth quarter of 2009 and 0.4 percentage points lower than the rate in the third quarter of 2010. The last time it was below the current level was in the fourth quarter of 1998, census data shows.
Still, there are limitations. RentBureau’s database receives rental payment histories every 24 hours from property managers, but currently includes only 8 million residents nationwide.
Last June, Experian acquired RentBureau, and, last month, started incorporating its data into its traditional consumer credit reports.
It’s “one more thing that lenders, landlords, insurance agents and even employers can learn about you,” said Bill Hardekopf, chief executive of LowCards.com, a credit-card comparison Web site. “This could be great news for renters who dream of owning their own home.”
Experian claims to be the first and only major credit reporting agency to include residential rental payment data in credit reports.
Chicago-based TransUnion, through one of its subsidiaries, collects rental payment data and supplies it to landlords with credit information to help them screen potential tenants. But, at this time, rental payment history on the basic credit file for routine credit inquiries is not available from TransUnion, spokesman David Blumberg said.
“TransUnion has always been a leader in using alternative data sources, like utilities data, to help provide a clearer picture of an individual’s credit history and help unbanked individuals to gain access to the credit they deserve,” Blumberg added. “TransUnion currently uses this information in all of its proprietary scoring models. “
If you pay your bills on time and pay off your credit cards in full each month, that’s plenty of “credit history” for anyone.
Yes – but people who cannot get credit cards yet like the people mentioned in the story (college students, recent graduates and immigrants) will now be able to build credit.
@IMHO and you also believe that 24/7 surveillance is fine since you “don’t have anything to hide”?
Actually, having different types of credit is important: car payment, credit cards, department store cards and now even medical and insurance payments are considered. A history of paying ON TIME is probably the most important…you don’t have to pay off the entire amount…
Define irony: Banks using credit scores to determine whether a person is deemed fiscally responsible when they themselves had to be bailed out on taxpayers’ dime for being fiscally irresponsible.
This is great. Now renters should have the ability to run an instant $9.95 “report” on landlords to ensure that they’re current on their mortgage payments and not facing foreclosure, and have sufficient cash-flow for necessary maintenance and repairs.
This will be very limited information. Only consumers with a rental history at a major apartment complex will actually be reported. Thousands that rent from landlords will not be reported.
ms Annie, you’re correct. Landlords/creditors are not required by law to report to the credit bureau and besides each credit bureaus chages $$ to the creditors to report their customers’ credit history. So, small apartment bldg owners are not going to rush to report rent payment history of their tenants.
Experian just wants ‘new’ business customers. The Co. could care less what it’s reporting methods do to a person’s credit score.
Well then, Ms. Annie, this should not be CHICAGO “breaking news” as that cuts about about 70% of the rentals within the city (I mean, with the $300K+ condos that wouldn’t sell for $175K that are now being rented for less thank 1K).
Oops, thats “less than” (Freudian slip LOL).
This is a real slippery slope here… what next, reporting on the money your college buddy loaned you?? Where does it stop?? People have a short memory. Remember what happened during world war two because someone was made a scapegoat?? You can only push the envelope so far before it becomes ridiculous and people start to rebel against the people making all the rules that put society into groups of have and have nots. They try to spin it like reporting on rent is a good thing to build credit – no it is not – it is just one more problem for poor people to worry about – one more mark against the record of a person that has job loss, health issues and gets behind – everything is not always the fault that you DONT want to pay something – sometimes you are UNABLE to pay something.Then these people making the rules wonder why the hatred builds???? Gee, I wonder why??????????????????
It’s “one more thing that lenders, landlords, insurance agents and even employers can learn about you,” said Bill Hardekopf, chief executive of LowCards.com, a credit-card comparison Web site. “This could be great news for renters who dream of owning their own home.”
LIARRRRRRRRRRRRRRRRRR
This isn’t good for people with a deadbeat roommate who doesn’t pay his/her half.
Will this be used to calculate a credit score? i know i dont borrow money and have a credit score of 0 and that my report is empty. If this goes into calculating a credit score i might finally get a score! lol
also: “Actually, having different types of credit is important: car payment, credit cards, department store cards and now even medical and insurance payments are considered. A history of paying ON TIME is probably the most important…you don’t have to pay off the entire amount…”
that quote makes me sick. great advice to give to people who want to worship and raise their credit score yet fail at money.
I’m wondering what percentage of landlords are or even can report tenant payment history.
My guess is that the percentage is very low and will remain so until the reporting is made much easier and until legislation is implemented to require reporting. I will not report any tenant payments until and unless I also have the ability to receive the histiories of prospective tenants.