Imagine if every rent payment could help build your credit, just like a mortgage payment does for homeowners. For millions of renters in the United States, this is now becoming a reality. Despite there being 44 million rental households in the U.S., less than 15% of renters have their payments reported to credit bureaus annually, leaving a staggering $750 billion in unreported payments each year. However, this trend is changing, and it’s transforming the financial futures of renters and property managers alike.
Why Report Rental Payments?
Reporting rental payments is a win-win for both parties. Here are some compelling reasons why it’s gaining traction:
- Builds Credit for Renters: By including rent payments in credit reports, renters can build credit by documenting their largest monthly expense. This can lead to an increase in FICO scores by 60+ points, as found in a 2021 TransUnion study. This boost can open doors to better financial products and opportunities.
- Incentivizes Timely Payments: 83% of renters are more likely to pay on time if their payments are reported to credit bureaus, according to a 2024 TransUnion study. This not only benefits renters but also property managers by reducing delinquency.
- Reduces Delinquency: Reporting rental payments can reduce payment delinquency by 50%, lowering outstanding balances and associated costs like evictions and collections.
Benefits for Renters
Renters stand to gain significantly from having their payments reported:
- Credit Building: Including rent payments in credit reports helps renters build credit, especially for those with limited credit history.
- Increased FICO Score: Reporting rental payments can increase FICO scores, making it easier to secure loans, credit cards, and other financial products.
- Access to Better Financial Products: With a higher credit score, renters can access better interest rates and terms on loans and credit cards.
Benefits for Property Managers
Property managers also benefit from reporting rental payments:
- Attracts Responsible Residents: By incentivizing timely payments, property managers can attract and retain financially responsible tenants.
- Reduces Delinquency: Reporting payments helps reduce late payments, which in turn lowers eviction and collection costs.
- True Value to Residents: Rent reporting offers a significant value to residents. It empowers residents to build credit and improve their financial health, making it an attractive amenity that enhances resident satisfaction and loyalty.
A Real-Life Story: How Reporting Rental Payments Changed Everything
Meet Sarah, a young professional who had always struggled to build credit. She had been renting for years but never saw any improvement in her credit score. That changed when her property manager started reporting her rent payments to the credit bureaus. Within a year, Sarah’s FICO score increased by over 60 points, allowing her to qualify for a lower interest rate on her car loan. This not only saved her money but also gave her the confidence to apply for a mortgage. Today, Sarah is a proud homeowner, thanks in part to the positive impact of rental payment reporting on her credit.
Legal Compliance and Transparency
Collecting and submitting rental payment data is not only permitted but also encouraged by law. In some states, like California, positive rental reporting is mandatory for certain properties. As of April 1, 2025, California law AB2747 requires property managers of single properties with more than 15 units or those managing multiple properties to offer rental reporting to all residents at lease signing and annually thereafter.
Why Partner with CredHub?
Partnering with an industry-leading rental payment credit reporting company like CredHub offers numerous benefits:
- Comprehensive Reporting: CredHub reports complete payment data to all major credit bureaus in the U.S. and Canada, ensuring that renters can build a robust credit history.
- Reduced Delinquency: By reporting both positive and negative payment behaviors, CredHub helps property managers reduce delinquency rates by up to 50%, leading to improved cash flow and reduced operational costs.
- Enhanced Resident Experience: CredHub’s platform not only improves financial health but also provides residents with access to special offers and discounts through their CredHub Perks platform, enhancing their overall rental experience.
- Streamlined Process: CredHub’s technology integrates seamlessly with property management systems, making rent reporting efficient and compliant with industry standards.
- Competitive Advantage: Offering rent payment reporting can differentiate your property from others, attracting more responsible tenants and improving landlord-tenant relationships.
By partnering with CredHub, property managers can leverage these benefits to create a more financially stable and attractive rental environment for both residents and investors.
