Most Renters Want On-time Rent Payments Factored into Their Credit Scores
A recent Fannie Mae poll reveals that over 80% of renters would like their on-time rent payments to be factored into their credit scores.* Rent is often a renter's largest monthly expense, and credit scores play a huge factor in the ability to pursue financial and economic opportunities, such as obtaining mortgage or car loans, credit cards, or student loans.
The survey results further reveal the value that renters place on their credit scores.
- 87% of respondents believe that having a good credit score is important
- 82% of renters who always pay their rent on time reported that they would expect to see an immediate increase in their credit score if rent payment history was included
- 79% recognize that having a higher credit score will provide them with greater financial opportunities
- 78% agree that their credit score would be more consistent if rent payment history were included
Crediting renters for on-time rent payments promotes greater financial stability, while setting renters up for a brighter financial future. Fannie Mae Multifamily has been helping renters build their credit through our Positive Rent Payment pilot. We partnered with three fintech vendors, Esusu Financial, Inc., Jetty Credit, and Entrata (recently acquired Rent Dynamics), to report positive rental payments to credit bureaus which can help renters establish, maintain, and improve their credit scores.
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We are extending our Positive Rent Payment pilot
Not only are we committed to individual wins for renters, but we are also driving towards long-term benefits that this program provides to multifamily property owner/operators. With the strong results we've seen during the first year of the pilot, we are excited to announce that the Positive Rent Payment pilot will be extended through December 2024. We will cover the costs of collecting and disseminating rent payment data for a 12-month period for multifamily property owner/operators of Fannie Mae financed properties who leverage one of the three approved vendors to collect the data.
Building credit can help alleviate challenges that limit a renter's ability to secure quality rental housing and can help them achieve their financial goals. This extension supports our objective to accelerate the adoption of rental payment reporting across the industry while advancing greater housing equity.
The pilot's first year has seen tangible results
Many property owner/operators participated in the pilot program at no cost and were able to see positive results, and our early data shows a trajectory toward better financial health for many renters.
As of September 2023, over 100 property owners, 2,170 properties, and 435,000 units have enrolled in the pilot. So far, we have seen:
- 240,000 participants reporting their rent payments
- 23,000 credit scores established
- Nearly 58% of participants have increased their credit scores, and participating renters who already had a credit score and saw an improvement had an average increase of up to 40 points**
Reporting on-time rent payments can help property owner/operators by reducing tenant turnover and lowering eviction rates.
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For more information about the Positive Rent Payment pilot, please visit: https://multifamily.fanniemae.com/positive-rent-payment
*Poll conducted online among the General Population. The sample was weighted to match the US Census and was conducted between 9/6/23-9/14/23.
**This is a positive-only initiative: Renters who miss a payment are automatically unenrolled to preserve their credit standing, and renters may opt out of the program if they prefer. Please note that the increase in credit scores may be due to additional factors other than positive rent payments.