Rent Reporting Can Positively Impact Credit Visibility and Credit Scores Among Renters

By Raquel Harati, NLIHC Research Analyst 

Recent research published by the Urban Institute, “Evaluating Rent Reporting as a Pathway to Build Credit,” explored whether reporting rental payments to credit bureaus would help renters build their credit scores. Credit scores are a key component of participating in the U.S. economy and having a good credit score expands opportunities to lease rental homes, access financing, and receive lower interest rates on loans. The authors found that rent reporting can be beneficial by significantly increasing credit visibility, going from no credit score to having a credit score, and can help raise existing credit scores to near-prime levels (above 601) for tenants with low or no prior credit scores. Renters with low or no credit scores are more likely to be under age 25, live in low-income neighborhoods, or be Black or Hispanic. The study’s findings suggest that rent reporting is a promising intervention that can help renters access the benefits of the credit system. 

Unlike homeowners who are able to build their credit scores with each mortgage payment, renters have historically not had their rental payments factored into their credit scores. One solution to this is reporting rental payments to credit bureaus. The authors tested the impact of rent reporting using a randomized controlled trial research design that compared renters who reported their rent payments (treatment group) with renters who had not yet started reporting their rent payments (control group). Rent reports were only made when rent was paid or a tenant was in good standing with their landlord. Participants for the study were recruited in 2021–2022 from subsidized rental developments and randomly assigned into the treatment and control groups. The study sample included 269 renters recruited from across six properties over the two-year recruiting period. 

Rent reporting increased the likelihood of credit visibility by 12 percentage points among those who reported rents compared to those in the control group. Rent reporting also appeared to increase the likelihood that renters would have near-prime credit scores by 25%. Credit card debt and total debt balances also declined among the treatment group, although the connection with rent reporting was unclear and the authors advise caution in interpreting this finding. Additionally, the study’s short duration and its overlap with COVID-19 era rental assistance, financial assistance, and eviction protections may have impacted results.  

The authors conclude that rent reporting holds promise as a credit-building tool for renters who are credit invisible or have low credit scores. Future research on rent reporting might include longer-term impacts, broader tenant populations (e.g., public housing residents, seniors), and explore cost-effectiveness or best practices for implementation. More targeted, supportive interventions—possibly paired with financial counseling or other similar services—could also help maximize the reach and effectiveness of rent reporting initiatives. 

The full article can be found at: https://urbn.is/3TjuVIA