CHICAGO– An increasing number of landlords are reporting rent to the credit reporting agencies, and the number is likely to grow as the youngest generation — Gen Z — is most interested in the practice, according to a new report from TransUnion.
The company reported its tenant and employment screening research found that more than one in four property managers (27%) who are aware of the practice now report rent payments to credit reporting agencies, with nearly one-third doing so since January 2020.
According to TransUnion, the number marks a “significant increase” since similar research in early 2019 was conducted and which found only 17% of property managers were reporting rent payments at that time. The research included two surveys conducted in February and March 2022, with responses from more than 350 multifamily executives and 2,039 adults who rent the home or apartment in which they currently live.
“We’ve seen some progress in property managers adopting rent reporting in the last couple years; however, there is clearly still room for the number of reporting companies to grow,” said Maitri Johnson, vice president of tenant and employment screening at TransUnion. “With a strong push from Gen Z renters, who make up a significant portion of the renter base today, we’ll likely see reporting become an industry standard—and as a result, a critical mass of renters who can elevate their standards of living through greater access to credit.”
Managers’ Rationale
TransUnion said the survey also sought to understand property managers’ rationale for deciding whether to report rent payments to credit reporting agencies as well as their perceptions of the process, which are outlined in the chart below.
| Top 3 Reasons for Reporting | Top 3 Reasons for Not Reporting |
| 1. Help residents build credit (80%) | 1. Process is too time consuming (22%) |
| 2. Encourage residents to pay on time (71%) | 2. Don’t know how to do it (21%) |
| 3. Attract residents who are financially responsible (49%) | 3. Too much work/Don’t see the benefit (20%) |
“While 72% of property managers who actually report rent payments say that the process is somewhat easy or very easy, only 28% of property managers who do not report rent payments expect that to be the case,” TransUnion said. “When asked to identify which benefits would convince them to begin reporting rent payments, 70% of property managers said they were at least somewhat likely to report if it meant attracting renters who pay on time. Additionally, 69% were at least somewhat likely to report if it lowered risks of evictions and skips.”
View From Renters
On the other side, TransUnion reported that when renters were asked how having their rent payments reported to credit reporting agencies would influence their behavior, 77% said they would be more likely to pay on time.
In line with these findings, third-party data providers and industry associations are becoming more vocal in their support of rent reporting, according to the company.
“Consumers should literally get credit for paying rent,” said Eric J. Ellman, SVP-public policy and legal affairs, Consumer Data Industry Association, in a statement to TransUnion. The more information the credit reporting system includes to prove their creditworthiness, the more consumers it can help access fair and affordable credit.”
Generation Z Leading the Way
In its survey of renters, TransUnion said it found more than half are aware that rent payments can be reported and are at least somewhat interested in having their rent payments reported. Those sentiments are more pronounced among Gen Z as 60% are aware of and interested in having their rent payments reported.
“That interest is also being put into action as 27% of Gen Z renters say they have their rent payments reported. This is significant, considering only 15% all renters have their payments reported,” TransUnion reported. “A related finding: 59% of those who have been renting five years or less say they are interested in having their rents payments reported, compared to 47% of those who have been renting more than five years.”
The research also indicates that rent reporting has a positive impact, as more than 70% of those who have their rent payments reported to credit reporting agencies are seeing improvements to their credit score,” TransUnion added. “As a result, they are planning to leverage their higher scores for material lifestyle improvements: 41% will apply for a personal loan; 38% will apply for a mortgage; and 28% will apply for an auto loan.
For info: “How Gen Z is Making Rent Payment Reporting an Industry Standard.”
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