Both renters and property managers stand to benefit from reporting rent payment history to credit reporting agencies. Property managers who report this data attract financially responsible residents who want to improve their credit score and are more likely to pay on time, leading to fewer evictions, while allowing tenants an opportunity to build credit, according to a TransUnion study.
Reporting of rent payments to credit reporting agencies has been on the rise and may further increase as a new policy is set to make it easier for rent payment history to help consumers qualify for mortgages. According to TransUnion, rent payment reporting is up to 13% this year, compared with 11% in 2024.
The Federal Housing Finance Agency (FHFA) in July announced an order that requires Fannie Mae and Freddie Mac to accept VantageScore 4.0 credit scores for mortgage underwriting. Allowing consideration of rent payment history in mortgage applications could help open the housing market to more first-time buyers, said TransUnion.
“The regulatory developments we’ve seen in this space are very encouraging,” said Maitri Johnson, SVP and head of TransUnion’s tenant and employment screening business. “The vast majority of renters reliably make on-time payments and they deserve to leverage that proven responsibility toward home ownership and other financial opportunities.”
However, the number of property managers who participate in rent payment reporting decreased for the first time in at least four years, from 48% last year to 44% so far this year, according to the report. In 2022, when TransUnion began its credit reporting survey, 27% of property managers participated. The firm suggested the decrease could signal that consumers are self-reporting their rent payments through third-party data furnishers.
Rent payment reporting appeals to renters, many of whom consider it a desirable amenity that incentivizes them to pay on time. More than half of renters indicated they are more likely to rent from a property manager who reports payments, and nearly 80% said they are more likely to pay on time when their payments are reported to credit reporting agencies.
Several states favor rent payment reporting and have backed that up with regulatory action. California, for example, requires property managers to report rent payments to credit reporting agencies, and Colorado recently piloted a program that requires property managers to offer rent reporting to tenants annually.
While most generations showed increased participation in rent payment reporting, Gen Z participation fell from 26% last year to 18% this year. Despite the decrease, this cohort still has the highest participation rate of all generations and stands to benefit the most from participating because they have had less time to establish a credit history.
Overall, 13% of renters participated in rent payment reporting, including 18% of Gen Z, 16% of Millennials, 12% of Gen X and 8% of Baby Boomers. For those who participate, the positive impact on credit scores is apparent. Overall, 79% of participants saw their credit score increase, including 80% of Gen Z, 88% of Millennials, 75% of Gen X and 70% of Boomers, according to TransUnion.
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