Renters are not getting the credit that they deserve. In the U.S. renters account for approximately 34% of the U.S. population.[1] Yet, for millions of renters who make timely rental payments, most of those on-time payments are not being reported to credit bureaus or being counted in consumers’ credit histories. This needs to change.

When I worked at the Consumer Data Industry Association (CDIA), the trade association primarily for the nationwide credit bureaus, I led the Rental Empowerment Project (REP), a program intended to increase the reporting of rental payment history into the consumer reporting system. Our outreach included to landlords, property managers, public housing authorities, FinTechs, banks, and government agencies.

There is a powerful body of evidence showing that when rental payments are reported the people who are helped the most are the ones that need the most help.[2] Renters in this country tend to earn less and have less wealth than homeowners.[3] This tide can be reversed. Rental payment reporting can literally open the doors to homeownership.

Recently the Urban Institute convened a conference, The Impact of Rental Payments on Credit Scores and Mortgage Underwriting. Among other things, attendees were reminded of the power of rental reporting to do good. Leaders in this work include nonprofits like Credit Builders Alliance; companies like Self, Bilt, and TransUnion Smart Move;  and the GSEs, Fannie Mae and Freddie Mac. I give a lot of credit to Fannie, for helping to encourage CDIA and the credit bureaus towards accommodating rental payment reporting.

Progress is being made in rental payment reporting, but I would like to see this advance more rapidly. This is not easy to do, however. Landlords, property managers, and public housing authorities must want to report rental payments, and some laws may prevent or discourage that reporting.

Rental payment reporting is one of the largest pieces of the puzzle to open doors to homeownership and financial empowerment. I look forward to millions of consumers walking through that door soon.

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[1] https://www.self.inc/info/rent-statistics/#:~:text=Renters%20account%20for%20approximately%2034,to%209.1%20million%20baby%20boomers.

[2] See, e.g., Kelly Thompson Cochran, Michael Stegman, & Colin Foos, Utility, Telecommunications, and Rental Data in Underwriting Credit, FinRegLab and Urban Institute, 2022; Michelle Lerner, Fannie Mae to include rent payments in mortgage applicants’ credit history review, Wash. Post, Sept. 8, 2021; Making Rent Count: How NYC Tenants Can Lift Credit Scores and Save Money, New York City Comptroller Scott M. Stringer, Oct. 2017.

[3] Drew Desilver, As national eviction ban expires, a look at who rents and who owns in the U.S., Pew, Aug. 2, 2021.