Strategy #4: Report Your Renters’ Payments to the Credit Bureaus
Reporting positive and negative payments to the credit bureaus is now possible. You can help your renters build their credit with every timely payment, and if they miss a month, it will be reported on their credit as well, incentivizing them to keep paying on time. According to The Credit Builder’s Alliance, “Among residents of one pilot group with a history of regularly paying late, those who agreed to have their rent payments reported were more likely than other residents to
substantially increase their rate of on-time payment.” In this pilot study, 79% of participants saw an average credit score increase of 23 points, showing that both landlords and renters can benefit from these programs. Note, California’s Senate Bill 1157, has special requirements for operators of subsidized multifamily units. Check with your legal counsel to best implement a rent reporting policy that complies with your local laws.
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