Costa Mesa-based Experian will now include positive residential rental payment data in credit reports. Agency officials believe that including the information from the company's RentBureau division will give underbanked consumers – such as college students, recent graduates and immigrants, among others – the opportunity to establish and build a credit history, allowing them to qualify for products and services with continuous on-time rental payments.
Almost 96 million individuals who rent are not getting the full points that they should based on their current credit reports because such on-time payments typically do nothing to boost scores, according to the National Multi-Housing Council. Additionally, only a subset of negative rental activity usually has an impact on a credit score. With Experian's new offering, a solid payment history will help many renters who need help rebuilding their credit scores due to financial hardships such as foreclosure and bankruptcy.
"Given that one-third of the U.S. population rents, we felt it was imperative to reflect the true creditworthiness of those individuals who responsibly pay their rent," said Brannan Johnston, vice president and managing director of Experian’s RentBureau unit.
But the new service stands to benefit more than just renters; lenders can update their underwriting procedures to automatically capture a consumer’s rental payment obligations from the credit report and eliminate the need for time-consuming manual entry. The service also will give lenders a more complete picture of an individual's monthly obligations to assist in offering credit to emerging consumers.
"For more than 20 years Experian has been a strong supporter of comprehensive data reporting for the benefit of lenders and consumers," said Steven Wagner, president of Experian Consumer Information Services. "Including rental payment data in the credit file is a groundbreaking win for consumers and our vision of full-file reporting. Many consumers feel that building credit is an uphill battle, but this approach gives renters credit for managing the payments for the place they call home."
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