NEW YORK—Renters saw their credit scores significantly boosted after property managers started reporting their payment histories to credit bureaus, new data reveal.
Rental payment history led to credit scores increasing by an average of 46 points, according to data from Freddie Mac and the financial technology firm Esusu Financial. It also helped establish scores for more than 27,000 renters for the first time, the data showed, according to the Wall Street Journal.
In 2021, Freddie Mac offered incentives like closing cost credits to multifamily property owners who agreed to report on-time rental payments to Experian, Equifax and TransUnion. Program participants are required to have a process for avoiding a negative credit impact when renters miss payments, the Journal explained.
Plan to ‘Scale’ Efforts
“We hope to continue scaling our efforts and establish rent-reporting as an industry standard, which can have a meaningful impact on renters when they seek financing for a home, a car or even an education,” Kevin Palmer, senior vice president and head of multifamily at Freddie Mac, told the Journal.
“The initiative reflects efforts to incorporate more into credit decisions beyond the traditional FICO score and to broaden access to affordable credit,” the Journal said.
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