City Comptroller Scott Stringer wants tenants who pay their rent on time to be able to boost their credit scores the way homeowners do when paying their mortgages.
Stringer plans to announce an effort Monday that will encourage landlords and property management companies to give their tenants, especially low-income ones, an option to report rent payments in a way that will increase their credit scores, the New York Times reported.
A study conducted by his office found that 76 percent of tenants paying less than $2,000 a month would see their scores improved by such a policy.
“This could create a powerful credit history that could lift you out of poverty,” he told the Times.
The New York City Housing Authority has a pilot program that allows tenants to report rent payments, but as of last week it only had “one person on board,” NYCHA senior advisor Tischelle George said.
George said NYCHA is trying to recruit some of the roughly 7,000 residents at the Queensbridge Houses into the program.
Advocates for tenants and low-income people have been promoting the policy since the credit-rating firm Experian introduced its opt-in program in 2010. But the system has not been adopted widely, and it can be burdensome for landlords and property management companies that have to put infrastructure in place to comply with federal credit reporting laws, according to Sarah Chenven, deputy director of the nonprofit Credit Builders Alliance.
But the incentive to pay on time to boost a credit score could disenfranchise renters who withhold rent from landlords as a bargaining chip to improve poor housing conditions, according to the National Consumer Law Center.
“There’s definitely pitfalls to it when the landlord-tenant relationship is not good, and in New York City, that’s pretty frequent,” tenant-advocacy attorney James Fishman said. [NYT] – Rich Bockmann