Experian Credit Report Includes Rent Payments

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Apartment for RentYour credit report and credit score are designed to calculate how likely you are to default on your loans. It’s increasingly being used in some surprising ways, such as determining whether or not to rent you a home. The reasoning for using credit this way, for determining whether or not to rent an apartment to someone, has to do with the reality that in many areas, it’s hard to evict a non-paying renter. You’re essentially “lending” them a place to stay with the hopes they pay you.

That said, it’s always been surprising that rental data was never included on a credit report… until today. It’s being reported that starting last January, Experian is including residential rental payment data on credit reports as long as the landlord reports the payments. Reporting information to the credit bureaus is voluntary, the bureaus can’t force a landlord (much like they can’t force a creditor) to report that information.

I think this is a great development because it allows people to improve their credit when they rent. This takes a little off the common advice that you should open a credit card in order to build credit. By simply renting, and having your landlord report it, you are building your credit. While it might be beneficial to open a credit card, to show responsibility with different types of credit, you aren’t forced to because no alternative exists.

It’ll take some time, and more data, to see how this plays into the scoring algorithm but I think it’s generally a positive development. I wouldn’t be surprised if TransUnion and Equifax jump on the bandwagon soon.

(Photo: beeteeoh)

{ 20 comments, please add your thoughts now! }

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20 Responses to “Experian Credit Report Includes Rent Payments”

  1. cubiclegeoff says:

    As with anything, there can be a lot of negatives of this. If the place you’re renting needs major repairs and nothing is done so you don’t pay rent (which in many contracts is your legal right), it would be hard to verify and fix the negative impact on your credit report I would think.

    • Texas Wahoo says:

      I believe that at least for now, only positive history will be reflected on your credit report. That may change in the future, as I’m guessing most rental companies are not going to report your information without the ability to use it as pressure for you to pay on time.

  2. Strebkr says:

    As a landlord, there is no way I am getting near this. It has no benefit for me. I need to see some benefit before I would begin reporting their rent paid.

    I do run everyone’s credit and I am on the belief that someone will pay their rent before their credit card bill. That shows up on their report so its good enough for me.

    • Melissa says:

      You seem lack regard for anyone except yourself. Your statement “There is no way I am getting near this. It has no benefit for me'” portrays a high level greed and selfishness. Your statement “IT HAS NO BENEFIT TO ME. I NEED TO SEE SOME BENEFIT (TO ME) BEFORE I WOULD BEGIN REPORTING THEIR RENT PAID.” are words of one who is self absorbed and lack good character. You heavily rely on another person’s credit to determine if your getting your rent money. I feel you are too caught up with the ability to easily obtaining a sense of security knowing you are not likely to get stiffed out of your money to realize… YOU ALREADY DO BENEFIT IN NUMEROUS WAYS THAT SHOULD NOT TO BE TAKEN FOR GRANTED AND SHOULD LEAVE YOU GRATEFUL TO DO SOMETHING KIND FOR ANOTHER PERSON! YOU benefit from knowing they have good character and won’t jeopardize that just to rip you off a few bucks. YOU benefit by them providing YOU with YOUR income without much effort on your behalf. YOU benefit by not being forced to deal with a long dreadful eviction process. YOU benefit by not having to sue them for YOUR money! If they don’t pay you after the first court order you will be facing more agonizing processes leading to long months of hellish battles to get your money. Rightfully so, you have NO problem reporting to the credit bureau and demolishing the credit of those who don’t, or can’t afford to, pay you. HOWEVER, DESPITE ALL OF THE WAYS YOUR CLEARLY DO ALREADY BENEFIT IN YOUR SITUATION, YOU’RE GOING TO BE TOO SELFISH TO SPEND A SMALL PORTION OF THE TIME YOUR FAITHFUL TENANTS SAVE YOU TO PERFORM A PROFESSIONAL, CONSIDERATE, ACT OF MUTUAL RESPECT, BY LEGALLY AFFIRMING ONE’S WORTHINESS OF TRUST IN THEIR LINE OF CREDIT?!?! SERIOUSLY??? It’s very unfortunate your tenants don’t have a means of determining that their hard earned money is going into the hands of such a greedy characterless person as yourself. If there were a detailed report of your character as portrayed in manners such as these statements made by your, I am sure the report would prove you to be a landlord whom they would be unwilling to associate with under the context of you being their landlord. I would really like to know what would make a person believe that every act of “kindness” they perform should be recognized and awarded in some manner. This illogical thought process would really bite you in your rear if people followed it when it comes to how they treat you. You choosing to, or not choosing to, report someone for being an outstanding tenant and not taking advantage of you could have the ability to transform one’s future for the better or for the worse.

      • Peggy says:

        Well said Mellissa! I could not have said it better. That person sounds extremely selfish oblivious to the fact of treating others the way you want to be treated goes a long way in life. Karma is a mother. Ihave to say it again: Well said Melissa. It proves Strebkr has no clue by the mere fact they posted such a disheartened comment.

  3. RyanLoos says:

    I think that this is a great idea! For me and my family due to the fact that we do not have any debt (therefore no credit score or report) this would help us if we every had to rent a place. I think that this is also good for people just starting out, rather than having to get a credit card or get car payments to build a credit score paying rent would be a good alternative to build a credit score without going into debt.

  4. freeby50 says:

    I would have to find out how much hassle it is to report the rent to know if its worth my while as a landlord.

    I do see a benefit though since it will give some tenants extra incentive to pay on time. If they know I’m reporting it to the credit bureau then they know paying on time will help their credit.

    And the article did say that next year they plan to add negative impacts so in time failing to pay on time will ding your credit too.

  5. zapeta says:

    I can’t see many landlords reporting to credit bureaus unless they have some some incentive. I’m not a fan of the plan once landlords can report both positive and negative. If you have some landlord/tenant dispute they could report you to the credit bureau saying you didn’t pay (even if you did). Even if you dispute their claims, it would show up on your report for a while and could impact your ability to rent elsewhere or buy a home.

  6. Shirley says:

    I think there are more negative aspects to this than positive ones. Not all landlords shine as pristine gold.

    • Strebkr says:

      As a landlord, I should take offense to that. (just kidding) I’ve run into some pretty shady guys. Stereotypes exist for a reason sometimes. I would put landlord right up there with use car salesman and lawyers.

      I only rent out our old house, not some 500 unit apartment complex. So I like to think I’m not one of those guys. My tenants are actually friends with us. I don’t know too many shadeball landlords who get invited over to dinner at their tenants place and vice versa.

  7. skylog says:

    as others have said, i do not really know what to make of this. i think it is great that it could add another chapter to the picture.

    that said, there are a whole basket of issues. will landlords participate? does the idea lose any power if none do? it is “regulated?” if there is a landlord / renter problem, what stops the landlord from simply leaving incorrect data? positive data? negative data?

    this is going to take some time to properly evaluate.

  8. irent says:

    I have been paying my rent on time for years but I rent from a local guy, not a management company. It makes sense that if you pay a couple hundred dollars for a car and it appears on your credit report then so should several hundred paid to rent. However, landlords are not obligated to participate in this. So how is that fair if you’ve been shelling out thousands of dollars on time every month for years but your landlord doesn’t report it? How could one possibly convince a landlord to do this “favor” for them? Also, I haven’t signed a new lease since my initial 2 years was up. We just kind of have an agreement. How could one report that? I like the idea, as it would benefit me greatly since I am always on time for years. But there’s no way my landlord would go for it.

  9. Personally, and I work in the information industry, I think there are quite a few areas where Experian should be concerned (or, more concerned) in regards to taking this new step with receiving rent payment reporting. In regards to tenancy laws, there are LEGAL reasons where a person might withhold rent payment (thereby creating a ‘late’ payment scenario). If not dealing with a landlord with character, this ‘legally late’ payment could do damage to the tenant’s credit rating and overall credit worthiness picture as viewed by potential new landlords and mortgage companies. I work for www. ireporttenants .com and we accept similar reporting only those recieving the information will receive a more full picture of the tenant. As a tenant, I would be a little concerned as my tenant rights may be an issue.

  10. ugotabekiding says:

    Whats next, the Electric Bill or how about Cable…
    This is a bad ideal that this credit bureau is doing
    and some people will look at there credit report
    and regret it when something brakes and doesn’t get fix and are forced to pay so not to get a negative.Or your one or two days late on your rent for some emergency,not only do you pay a late fee, you get a negative on your report. I don’t think the banks will take this in account very much, with upping your score or getting that loan and credit card.But will surly point it out why your Interest points or APR is higher when you do get a loan with one or two or ? rent negatives.Than again banks may turn you down with rent neg the way they are Operating in todays Economy. It’s a very bad ideal and will work for the banks more than it will help you. We have a standard
    that banks work with in credit, lets not hinder the Borrower even more when applying for credit or a loan.

  11. morgan48 says:

    I think this is a wonderful idea of landlords having to report to the bureaus each month, if you don’t pay your rent , they report that. I think a landlord should not be able to report derogatory credit if he’s willing to report positive credit……I’ve been paying $1300 @ month for the past 4 years, never been late on rent or utilities…and I’m a disabled veteran trying to buy my own home, can’t get financing, but paying some else’s mortgage for 4 year..3years prior also..and still can’t get a home loan..this is outrageous and unfair. we pay the landlord’s mortgage to keep him in good credit standing and can’t get a loan. I have even upgraded the property where I live by redoing the mstr bath, installed a whirlpool and tile, was not able to use bthrm the first year and half…as soon as this was done, landlord had property refinanced at a lower rate..but my rent has stayed the same. when I first moved in, it was filthy, cleaned it thanks for that..but if I was to ever be late on my rent and utilities, he would report me to the credit reporting agencies in a heart beat. I think it dhoulf be a law against anyone able to report negatives if they won’t report the positives.

    • hair11 says:

      I understand you completly. My husband and i have been leasing a home for almost 4 years. We pay on time every month.As for our credit, it nevers gets better no matter what we do we still are unable to purchase the house. I think all landlords should have to report to the credit agencies. they check our credit before we rent or lease the house, so why not report positive payments?

  12. Audra says:

    Hello, i am in the process of rebuilding my credit and has not seen a significant change after i paid off alot of my debt but i have been renting for the past 30 years and been in tx for the past 11 yrs with a excellent rental history. how do i get my rental history reported on my credit report. i am 2 months ahead on my rent and would like this to be reported, the other credit bureaus need to do the same. i am not a fan of credit cards so to increas my fico score i got 1 and use it very spareingly. please let me know how this can be reported on my credit report. thanks audra

  13. Ms. Helms says:

    I most deffinately think that landlords should have the opportunity to report renters payments to the credit bureaus and it shouldn’t require a difficult process to do so. Yes, it is a good idea for landlords to have to report every month on their tenants to show good faith in bill paying or vice versa.

  14. Charles says:

    I think reporting it will be great /they should contact the renter for proof of payment as well/that way no negative action goes against anyone /why not get info from the bank the renter is using/like bank checks forwarded to the landlord / credit company should make more easier than difficult!!!!

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