Reporting Rent to Credit Bureaus

market research

In trying to figure out how to get my residents’ rent reported to the credit bureaus (I own a SFH rental in Denver) I ended up with some accidental market research on credit reporting that I thought I’d share.

The top three items that popped up when I searched “Report Rent to Credit Bureaus” were the three links below, and they were all targeted to the renters’ perspective, not the landlord. (I’m probably the only nut out there searching this as an individual owner)

1. Credit Rent Boost

2. Level Credit

3. This Nerd Wallet Article

I researched three different groups when determining who to partner with for credit reporting, positioned as a “layperson” individual landlord:

Pinata is charging $4/unit and offering their product line in conjunction with a renter rewards program, which they estimate provides $60/month of rewards for each resident. They are open to working with individual landlords. They require working with an account rep to set up and their response time was frankly too slow for me so I moved on to other options. They automatically report rent as on time unless the owner reports a late payment, so a monthly login is not required. As a private owner, I like this feature as it saves time. They provide information to all three credit bureaus. They do not report to utility companies.
PayYourRent offers same-day rent payment processing and next-day rent deposits. They charge $9.95/month for 1-5 units, including 1 ACH transaction, $2.50 per additional ACH, 2.95% per credit card payment, and 3.25% per AMEX payment. Their online system seems to be pretty user-friendly and I didn’t have to speak with anyone to get the account set up. (I only went so far as to enter my bank account information, so can’t speak efficiency past that point).
Rent Reporters immediately put me off with a $95 setup fee and the lack of clarity on how to contact a representative to confirm compatibility with private owners. To get information as a landlord I had to sign up as a partner through this group called “partnerize”, which made it seem like I was going to go out and sell their product for a commission. I did not spend much time with this one. They report to TransUnion and Equifax.

Using industry connections as a multifamily executive, I reached out to the below:

Till provides reporting to (I believe two of the three) credit bureaus free of charge. They are working exclusively with larger operators. They offer the resident an opportunity to pay over time, which is great for the renter. Maybe not as great for the individual owner, payments are processed through their system so would delay hitting the Owners’ account. To offset that inconvenience, they do offer some level of collection/delinquency support. For an institutional owner, this would likely not be an issue.
Rent dynamics includes a program called RentPlus, which provides rent reporting to all three credit bureaus and is targeted towards an institutional operator. Their program charges residents for the service and thus an income opportunity for owners. RentPlus has partnerships with banking and financial literacy solutions to support the residents’ credit-building goal and has a free credit score tracker in progress.
Fannie Mae is offering complimentary rent reporting to owners with qualifying loans for one year. This is a fantastic opportunity for a property with Fannie Mae financing. A current downside for the renter is that they are only reporting to one credit bureau, not all three.
Rent Reporting Center caters to those interested in a DIY approach, though they acknowledge the time and effort required to establish such a program, contributing to the rising popularity of third-party services.

Most of the companies providing rent reporting services are targeting large multifamily properties and not individual owners, though with states like California & Colorado requiring rent reporting, it will be interesting to see if one of these groups jumps on the 24% market share of individual owners (per the below data from NMHC).

Owners/Operators of multifamily real estate of any size (1 to 1,000,000 units) should be looking at reporting rent to their credit bureaus for four reasons:

States are beginning to require rent reporting to credit bureaus.
Most lenders see this as a qualified ESG initiative.
It can be an income opportunity for owners.
It’s the right thing to do. In most households, rent is the largest and first payment to be made each month. In cash-constrained households, bills that impact creditworthiness are often paid later, leading to lower credit scores and perpetuating a cycle of hardship. Rent tracker does a fabulous job of outlining the positive impact these programs can have for renters in this article.

Reporting Rent to Credit Bureaus

market research

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