Data, Member Exclusive

‘Leveling the playing field’: Could rent reporting pave a path to greater financial inclusion?

  • Timely rent payments aren't taken into consideration by credit bureaus, missing an opportunity to score thin- or no-file people.
  • Rent reporting could turn out to be a solution.

Email a Friend

‘Leveling the playing field’: Could rent reporting pave a path to greater financial inclusion?

When tenants sign a lease, they agree to pay a price in addition to their rent. 

Renters, unlike homeowners, don’t get points with credit bureaus for paying for their homes. Even if a person is vigilant about paying their rent on time, their credit score, for the most part, won’t reflect that behavior.

Unlike mortgages, rent isn’t a debt, and so it’s not something that has to be reported to any of the major credit bureaus. 

“If you are a renter in the United States, and you do not own where you live, the rent payment is traditionally not reported to the credit bureaus, and your payments are not being reflected in the credit report,” said Dara Duguay, CEO of Credit Builder Alliance (CBA), a non-profit association that focuses on helping low and middle-income earners improve their credit scores. 

The Credit Builder Alliance consists of almost 600 nonprofits and aims to improve credit and overall wealth for low-income households. One of the things the organization helps with is rent reporting.

According to Duguay, rent reporting, which brings consumers’ rent payment activity to credit bureaus, could help tenants improve their credit scores.

The organization has been incentivizing rent reporting for over a decade. It does this by reaching out to affordable housing providers and walking them through the process of reporting rent payments to the credit bureaus. In New York, for instance, the organization works with the New York City Housing Authority (NYCHA), which has 500,000 residents that live in affordable housing.  

In June, CBA furthered its rent initiative by creating a Rent Reporting Technical Assistance Center (RRTAC), with underwriting from Experian.

The center is a website which helps people navigate the different steps they need to take in order to report their tenants’ credit. The website also offers up CBA’s own experts for help and support. 

The CBA’s new rent initiative comes in conjunction with California’s new bill, called SB 1157, which was passed last year. 

The new law, which took effect on July 1st, makes it obligatory for certain landlords that own multifamily units to offer residents in a subsidized home an option to report their rent payments to a major credit bureau. 

The website is to help guide these landlords through the rent reporting process.

“We decided to create this [website] so that we could help those affordable housing property owners in California understand what they need to do,” said Duguay.

One of the major benefits of rent reporting could be bridging the racial wealth gap.  About 85% of the people CBA serves are people of color. 


“Rent reporting could help to level the playing field,” said Duguay.

CBA’s next steps as an organization may be inline with continuing to streamline the rent reporting process. For instance, the website offers a list of fintechs property owners can partner with in case she doesn’t want to do the reporting solo.

“We found that a lot of affordable housing providers don't want to learn how to do credit reporting. It's very technical and they also don't want liability, and they don't want to have to respond to consumer disputes,” said Duguay.

But rent reporting may still pose some risks for the actual renters. According to Tom Henske, financial advisor at Fifth Avenue Financial, one has to do with the landlord. An uncordial relationship between an unprofessional landlord and their tenants could lead to the former messing up the latter’s credit score out of spite.

Then there’s the differences among credit bureaus, said Henske. Not all of them accept rent payment data in the same way, which could lead to all sorts of tangles, like paying fees for no reason.

But for now, rent reporting adoption seems to be accelerating. California’s new law, for instance, seems to be on its way to Colorado. 

“We're hoping it's going to get traction all over the country,” said Duguay. 

0 comments on “‘Leveling the playing field’: Could rent reporting pave a path to greater financial inclusion?”

10-Q, Member Exclusive

How Affirm Card plans to kill credit cards

  • How would you dub a card that has the practicality of a debit card with the added functionality of a credit card? That's the Affirm Card.
  • Launched in early 2021, the Affirm Card has been in the spotlight lately. But what led to garnering significant attention now?
Sara Khairi | December 04, 2023
10-Q, Member Exclusive

Robinhood unveils a 5% APY for Gold members, but how will users respond?

  • Robinhood's recent move to challenge traditional banks includes its increased savings offering, a 5.0% APY for Robinhood Gold Members. 
  • The stock trading platform appears to be in a precarious balancing act, grappling with the escalation of deposit strategies while facing a decline in both transactions and monthly active users.
Sara Khairi | November 20, 2023
10-Q, Member Exclusive

Q1’24 affirms Affirm’s upswing in BNPL

  • Affirm's quarterly results indicate that back-to-back enterprise collaborations in conjunction with collective strategies are eventually winning out keeping the firm on course.
  • Going forward the BNPL provider intends to focus on continuing to invest in risk management, technology, and product development.
Sara Khairi | November 13, 2023
10-Q, Member Exclusive

Q3: The PayPal story isn’t over

  • PayPal saw improved earnings in the third quarter compared to the previous one.
  • Chriss answered some of the burning questions and gave a bit more color on what firm assets could require more work to turn around than he thought.
Sara Khairi | November 06, 2023
10-Q, Member Exclusive

Ted Pick is Morgan Stanley’s new leader. Where does it go from here? 

  • The question, 'Who will succeed James Gorman at Morgan Stanley?', that echoed in Wall Street's nooks and crannies has finally been answered.
  • The present and incoming CEOs might have different management styles. What they both share, however, is a shrinking economy and growing macroeconomic pressures at the time of assuming control.
Sara Khairi | October 30, 2023
More Articles