Unreported: Majority Of Renters’ Payments Escape Credit Bureau Radar

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Unreported: Majority Of Renters’ Payments Escape Credit Bureau Radar

Jun 22, 2023 | News | 0 comments

According to recent research conducted by TransUnion, 36% of property managers who are aware of the practice of reporting rent payments to the three major credit agencies are actively participating in this practice. This information was provided by TransUnion’s Tenant and Employment business division, indicating a significant 37% increase in the proportion of property managers reporting rent payment data compared to the previous year.

Interestingly, almost half (48%) of the property managers currently reporting rent payments began doing so in 2022, likely influenced by solutions like TransUnion’s TruVision Resident Credit, which contributes to individuals’ credit scores. The main reasons stated for reporting rent payments were to assist residents in enhancing their credit scores (86%) and to foster timely payment habits among them (52%).

The findings are based on a survey of 150 property management executives representing mid- to large-sized properties and 3,301 current renters. TransUnion also noted that property managers reluctant to report rent payments directly are partnering with third-party vendors for rent reporting.

TransUnion’s study revealed that 54% of property managers chose “other” when asked about their reasons for not reporting rent payments. Among them, 32% were in the process of setting up rent payment reporting through a third-party provider. When asked about the factors that would prompt them to report rent payments, 85% expressed interest, especially if it attracted tenants who consistently paid on time.

Gen Z renters, who are predominantly younger and more prone to renting, had their rent payments reported nearly twice as often as the general population, with a rate of 21% compared to 11%. Since Gen Z constitutes a significant portion of today’s renters, this shift carries considerable implications. Moreover, 80% of renters whose payments were reported experienced an increase in their credit scores. Younger renters actively engage in rent payment reporting and gain greater benefits from it.

The report also highlighted that a majority of renters (58%) preferred renting from entities that reported rent payments, especially among younger generations. Additionally, 82% of all renters expressed a greater likelihood of making timely payments if their payment history was reported.