Can a landlord report late or no rental payments to the credit bureaus? If so, how?
In order for a landlord or apartment management company to report information directly to Experian they would need to become a subscriber to our services. To do so, they would need to meet very stringent reporting standards as required by federal law, and additional security and system requirement of Experian. Membership to Experian’s services is cost prohibitive in the vast majority of cases, particularly for individual property owners or small management companies.
That is one of the reasons rental payments are not typically reported to the national credit reporting companies. A second reason is that such payments fall into a category of information often referred to as alternative credit data.
Such information is credit-like in that you are making a payment each month, but you are simply paying for services in advance, which is not the same as repaying a debt. It does not reflect how you might manage new debt in the same way that your credit accounts or loans are predictive of future payment behavior.
While rental payments do not yet appear in a credit report, failure to make rent payments on time, or at all, often does find its way into a person’s credit history as a collection account. Landlords and apartment management companies may send unpaid rent amounts to a collection agency, which then reports the unpaid debt to a credit reporting company.
Landlords and apartment management companies may also file civil suits for broken leases and unpaid rent. In that instance, the public record would become part of the credit report.
So, while late or unpaid rent is not usually reported directly, failure to pay your rent still can have a very negative impact on your credit report.
Thanks for asking.
- The “Ask Experian” team