BROOKLYN, N.Y.–Two credit unions here have partnered with New York City Comptroller Scott M. Stringer on a pilot program aimed at helping people to use their rent payments to boost their credit scores.
The program, “Making Rent Count,” could especially help residents of neighborhoods such as Brownsville and East New York, where the median credit scores are 592 and 602, respectively, according to supporters of the effort.
“When it comes to your wallet – credits scores matter. We’re facing an affordability crisis, and we all know how soaring prices and sky-high rents make life difficult for New Yorkers across the five boroughs,” said Stringer in a statement to the BK Reader. “One of the hidden roadblocks to financial success is credit – and access to it. That’s why our new pilot program is so important. It’s a model that we want to bring from the Bronx to Brooklyn and citywide so that everyone has access to an opportunity like this. “
In October 2017, Stringer reported in a “Making Rent Count” report that there were deep disparities in credit scores across the five New York City boroughs. One in five New Yorkers does not have a credit score and nearly one-third of city residents have sub-prime credit scores, the report found.
“Renters’ credit scores are often penalized by landlords, bill collectors and others when they fall behind on payments; yet they do not see a benefit to their credit scores for paying their rent responsibly,” the BK Reader reported. “The new pilot project aims to correct that imbalance.”
Under the program, more than 600 tenants across 27 buildings in the Bronx will now be able to add their rent payments to their credit histories. The Banana Kelly Community Improvement Association, which manages the buildings, has agreed to report rent information directly to the credit bureaus for those who choose to participate in the pilot, according to the city.
In addition, the New York City Housing Authority is currently partnering with two credit unions, Brooklyn Cooperative Federal Credit Union and Urban Upbound Federal Credit Union, to give NYCHA residents the option to report their credit and to have access to credit building devices, according to BK Reader.
The comptroller’s analysis predicts that adding rent to credit scores would grant a new credit score to approximately 30% of renters for the first time, while it would either raise scores or add additional depth to credit files for 94 percent of participants, BK Reader added.