THE BENEFITS OF POSITIVE RENT REPORTING
Positive rent reporting is the process of reporting a tenant’s on-time rent payments to at least one of the three major consumer credit bureaus for inclusion in their consumer credit report. It is a strategy to establish a credit history for a resident and it can help build that resident’s credit score. Research by the U.S. Department of Housing and Urban Development (HUD) has consistently shown that “for renters who are ‘unscoreable,’ meaning their credit history is too thin to receive a credit score, positive rent reporting not only results in scoreable credit files, but also typically results in moving renters to prime (661-850) or nonprime (601-660) score tiers.”
According to HUD, “renters with prime scores (661-780) at baseline increased the least after enrolling in positive rent reporting and renters with subprime scores at baseline (300-600) increased their scores the most.” Another benefit of offering rent reporting to tenants is the ability to use it to encourage those tenants to pay their rent on time. • On-time payments will result in an increase in their credit score. • Late payments will result in their credit score going down.
CALIFORNIA MAKES RENT REPORTING LEGAL
Recently, a new trend in rent reporting has been developing. In 2024, California passed AB 2747, which allows tenants to request that their landlords report their on-time rent payments to credit bureaus for the purpose of improving their credit scores. California has made it a legal responsibility of certain landlords to offer voluntary rent reporting to their tenants. Starting in April 2025, those renters in buildings with 15 or more units will be able to report their on-time rent payments to the credit bureaus with the option to opt in or out of the service.
California landlords are required to offer positive rent payment reporting, but can still report rental debt to the credit bureaus. By ensuring rent payments contribute to credit history, California’s rent law AB 2747 creates a practical way for tenants to improve their financial standing while providing landlords with a tool to promote timely rent payments. Tenants may utilize rent-reporting services, such as FrontLobby, to have their monthly payments reported to the three main credit bureaus, even if their landlord does not participate. Click here to begin rent reporting with FrontLobby.
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