More Residents Want Rent Payments Reported, TransUnion Finds

Photo by Marcus Lenk on Unsplash

Residents may not be clamoring to have their rent payments reported to the three major credit repositories, at least not yet. But new research released today indicates that more renters are cognizant they can ask landlords to do so. And a growing number have already taken the step.

According to a survey by TransUnion, more than half the 2,039 renters polled are aware their rental payments can be reported and are “at least somewhat” interested in doing so.

The trend is somewhat more pronounced among the youngest renters, the study found. About 60 percent of GenZers are aware of and interested in having their payments reported. And 27 percent already allow their rents reported. That latter figure stands in stark contrast to the universe as a whole. Indeed, its nearly twice as many of all renters who have their payments reported.

And in a related finding, 59 percent of those who have been renting for five years or less say they are interested in having their payment reported, compared to 47 percent of those renting for more than five years.

Maitri Johnson, vice president of tenant and employment screening at TransUnion, said the survey results suggest that property managers have a good opportunity to focus on financial inclusion as a way to appeal to residents. Reporting rent payments works for both landlords and residents in that it attracts those who payment on time and rewards them by helping build their credit profiles and scores.

Eric Ellman, senior vice president for public policy and legal affairs at the Consumer Data Industry Association, agreed, maintaining that consumers should get credit for paying rent.

Some landlords agree, too. The survey, which included 353 multifamily executives, found that 27 percent are aware of the practice, with a third of them already doing so, some since as far back as January 2020. The last time TransUnion conducted similar research, in early 2019, only 17 percent were reporting rents to the credit repositories.

Johnson noted the progress, but said more property managers need to take that step. In that regard, the poll found that among landlords who don’t report, 22 percent said the process was probably too time consuming and 20 percent said it either took too much work or they didn’t see the benefit. Twenty one percent said they had no clue how to do it.

But among those who did report, 72 percent said the process is somewhat easy or very easy.

Landlord consideration

Asked what might convince the nay sayers to change their minds, 70 percent said they were at least somewhat likely to report if it meant attracting renters who pay on time. And 69 percent said they might do so if it lowered risks of evictions and skips.

Among reporting landlords, on the other hand, 80 percent said they did so because it helped residents build credit, 71 percent said it encouraged their clients to pay on time, and 49 percent said it helped attract more financially responsible residents.

And when renters were asked if having their rent payments reported to credit reporting agencies would influence their behavior, 77 percent said they would be more likely to pay on time.

The research also indicates that rent reporting has a positive impact, as more than 70 percent of those who have their payments reported are seeing their credit scores improve. And as a result, a significant minority are planning to “leverage their higher scores” to apply for personal and auto loans.

Meanwhile, in another survey released by the Federal Reserve Bank of New York, renters are expressing less of a chance that they would buy a home if they were to move over the next three years. Renters also reported a marked decline in their expectations of ever becoming home owners.

The probability among renters of buying in the next 36 months fell “sharply,” the NY Fed reported, from 68.5 percent in 2021 to 60.7 percent in this year. The decline is the first reduction in this part of Survey of Consumer Expectation since the survey’s inception in 2014, and now sits at the lowest level since 2015.

There also was a big decline in the number of renters who believe they will own sometime in the future, from 51.6 percent in 2021 to 43.3 percent this year. The current reading is a series low, the NY Fed said, and is “well below” 50 percent for the first time since 2014.