DENVER (8/6/14)--Renters could see their credit scores climb immediately if more property managers begin submitting their rental payment history to credit bureaus, analysis by TransUnion and Experian has found.
Especially if the consumers are considered subprime.
Eight of 10 subprime consumers, or those considered to be a higher risk to lenders, saw credit scores increase just one month after starting a new apartment lease, TransUnion's analysis revealed, and nearly 41% watched their VantageScore jump 10 points or more.
"Despite millions more renters (than in the past), most rental payment histories are not provided to credit bureaus, and renters looking to improve their credit standing cannot do so," said Tim Martin, TransUnion executive vice president, who said that the number of renters in the United States has increased by 5 million since 2007.
For the overall population of renters, about two-thirds experienced a positive or neutral change to their VantageScore credit score when their payment history was submitted after renting for just one month. Two in 10 renters experienced a 10-point jump.
"We believe reporting rental payment performance is simply the right thing to do for apartment residents and the apartment rental industry," Martin said. "Renters will be able to build positive credit history, gain access to more financial products and, most importantly, help them recover from the housing market crash."
Further, property owners will gain certainty about residents' payment history, Martin added.
Experian, a California-based information services provider, recently completed a similar analysis of how reporting rental payments can improve the financial health of subprime consumers who have positive rental-payment histories, and found comparable results.
Among the findings: