Published : Thursday, February 23, 2017 | 6:40 AM
Pasadena-based Rent Reporters, a rental history reporting company, says an increasing number of renters between the ages of 25 and 34 – the millennial generation – are now proactively reporting monthly rent payments to the major credit bureaus, enabling them to build and boost their credit scores.
According to data Rent Reporters released Wednesday, the number of consumers using rental history reporting services has increased by 290 percent – a threefold jump – from 2015 to 2016, reflecting a growing awareness among consumers who see the benefits of these types of services.
The company says reporting rental payments history can increase credit scores by an average of 50 points within the initial 24-month report of credit history.
Late generation millennials, those between the ages of 25-34, make up the largest group using rental history reporting services at 35.6 percent. Early Generation Xers, those between the ages of 35 to 44, are the second largest group at 33.8 percent, according to Rent Reporters. These age groups tend to have lower credit scores and have the most credit card debt.
Rent Reporters also say California tops the list in reporting rental payments, with Georgia coming in second, Florida third, Illinois fourth and Texas taking fifth place.
In 2015, the top five spots consisted of California, Texas, Florida, Georgia and North Carolina. Georgia experienced the highest increase from being ranked fourth in 2015 to taking the second spot in 2016.
Generally, the Southern U.S. has seen the most increase in consumers using rental history reporting services, the company says.
The majority of renters who fall into the “credit invisible” and “credit unscorable” category – those with no credit scores or with low scores – make up a portion of Rent Reporters’ 4,000-plus customers. These consumers are most vulnerable to predatory lending and face significant challenges in accessing most mainstream credit markets.
While these groups are often the most financially vulnerable, they are often the most credit responsible — as they have to be responsible to pay back a loan at rates as high as 100 percent or more.
“Rent payments have not been one of the historically accepted data sources for calculating credit scores and people should be rewarded for consistent responsible financial behavior,” John Simpson, Rent Reporters CEO, said. “We not only want to redefine credit scoring, but also lead the way in educating the public about the smart steps to take to build credit.”
Rent Reporters, with headquarters offices at 251 S. Lake Avenue in Pasadena, is helping to redefine the calculation of credit scores in a way that reflects modern economic life for the 100 million people in the U.S. who have rent as their single major monthly expense.
For more information, visit www.rentreporters.com.