By: Staci Baker
For the one-third of the U.S. population that rents, in the past, rental payment history has not been included in determining a credit score. With the acquisition of RentBureau by Experian, renters’ credit can now be affected by on-time payments or account delinquency, the same as an individual that owns a home.
Why is it important to include rental payment history? Including rental payment history in credit score data strengthens the analytics used to compile credit scores by giving a more complete picture of an individual’s payment history. For consumers with no history on which to build a credit score, this allows them to create track record of continuous, on time, repayment. I believe the power this brings to multi-family owned units is the ability to quickly and easily determine who is either a low credit risk, or higher credit risk when leasing an apartment.
As a property manager or resident screener, the risk that is taken on new tenants can be high. There are many unknown variables regarding a tenant’s credit worthiness, even once an application is completed – do they have a good history of making payments on time, did they fill out their application truthfully, will they be a good neighbor and many more. Now that the credit risk management of applicants includes rental payment history in the consumer credit file, it will identify better quality residents, reduce delinquency rates and lead to greater collections management.
