Rewards for Consistency
Consistent on time payment of rent can boost credit scores of first time homebuyers and people whose credit scores need rebuilding because of foreclosures.
Help from Credit Reporting Agencies
Daily Real Estate News, an online industry periodical says that Experian, a leading credit report company, added a section to its credit reports last year that reflected on-time rent payments. Now the two other major credit reporting companies are following suit.
The article states that “nearly half of high-risk consumers saw an increase of 100 points or more after their rental history was added to their credit report, says Brannan Johnston, the managing director of Experian’s rent bureau. Consumers with average or higher credit scores, on the other hand, did not see any major difference to their scores.”
The way this works is that property management companies report their rental payment data to Experian RentBureau directly and automatically from their property management software.
A Chance to Rebuild
Although it does not impact everyone, for people who have fallen on hard times due to workforce reductions or were in over their heads in their last mortgage and foreclosed, this feature offers a chance to rebuild toward the future.