Short answer: Yes.
In April, a new bill went into effect in California, requiring landlords with 16 or more units to report positive rent payment information. In Missouri, a pending bill aims to establish similar requirements. Here in New York, a bill that would require landlords to offer tenants the option of rent reporting is currently under review by the State Senate.
Clearly, momentum is building — and now is the perfect time to learn more about rent reporting and consider using it with your tenants. Our team has implemented rent reporting for the last couple of years, and we’ve seen firsthand how it can benefit tenants, landlords and property managers.
What is rent reporting?
Rent reporting involves submitting tenant payment history to at least one of the major consumer credit bureaus, like Experian, Equifax, and TransUnion. Just like a credit card or loan, on-time payments can increase a renter’s credit score — while late or missed payments can ding their score.
What are the benefits?
Increase on-time payments.
Unsurprisingly, tenants are more likely to pay on time when rent payments — just like a car or mortgage payment — can affect their credit score. A 2022 study by TransUnion found that 77% of renters would be more likely to pay rent on time if their payments were reported to credit bureaus.
Reduce delinquencies and evictions.
Reporting rent — especially missed or partial payments — creates real-world consequences for problematic tenants. These marks can remain on a credit report for up to 7 years, which encourages better communication and compliance with lease terms. Over time, this helps lower eviction rates, reduce legal costs, and decrease vacancy turnover.
Offer a credit-building opportunity for responsible tenants.
Reporting on-time rent can help tenants establish or improve their credit score. In the future, it can help them qualify for better interest rates and financing options. In the same 2022 study, more than 70% of tenants who had their rent reported saw improvements to their credit scores. This higher score can be leveraged for material lifestyle improvements, like a personal loan, auto loan, or mortgage.
Attract renters who are financially responsible.
In recent years, there’s been a rise in tenants seeking out rent reporting: In 2019, a TransUnion survey showed that two-thirds of renters (67%) preferred a rental unit with reporting already in place. That number is likely to increase as awareness of rent reporting grows.
Improve tenant screening.
The increased use of rent reporting will also improve tenant screening. Having rental payment history on a potential tenant’s credit report allows for better risk assessment and smarter tenant selection.
Takeaways
In 2019, only 17% of property managers were reporting rent payments. In 2022, that number jumped to 27% and will likely continue to grow.
But it’s more than a trend. Rent reporting is a tool, and a powerful one: Giving tenants a method of improving their credit attracts and creates responsible tenants — while creating a stronger tenant relationship and reducing delinquencies and evictions.
