The Real Deal Miami

Rent payment tracker to impact credit ratings

January 31, 2011 06:46PM

For years, renters who fell behind on their payments weren’t concerned about the impact that a late payment would have on their credit rating. But that may be changing, according to Wallet Pop, as Experian RentBureau, one of the big three credit bureaus, recently began collecting data about consumer rental payments and including that data in its credit reports. For 2011, Experian is only reporting positive rental payment information, but starting in 2012, the company will also report negative information such as late rent payments. “Given that one-third of the U.S. population rents, we felt it was imperative to reflect the true creditworthiness of those individuals who responsibly pay their rent,” said Brannan Johnston, vice president and managing director of Experian, in a statement.

RentBureau is a national network of 45 property companies that collect data about rental payments and automatically report that payment history to RentBureau every 24 hours. Experian acquired RentBureau in 2010. Some industry experts say the inclusion of rental payment data in credit files is beneficial to consumers because it will help banks and other lenders see which consumers are actually credit-worthy, even if they don’t yet have traditional forms of credit, like credit cards or mortgages. “We believe that this is a real breakthrough,” said Barrett Burns, CEO of VantageScore Solutions. “It’s especially great for first-time homebuyer applicants and those trying to establish credit because rent is most likely their biggest obligation.” [Wallet Pop]