Renters Now Have the Opportunity to Establish or Rebuild Credit

By: Kari Michel

In January, Experian announced the inclusion of positive rental data from its RentBureau division into the traditional credit file. This is great news for an estimated 50 million underbanked consumers – everyone from college students and recent graduates to immigrants – to build credit with continuous on-time rental payments.

With approximately 1/3 of Americans renting, lenders who are using VantageScore will benefit from the inclusion of RentBureau data into the score calculation.  VantageScore from Experian is able to both enhance its predictive ability for those that can already be scored as well as provide scores for those that previously could not be scored. With the inclusion of RentBureau data, 34% of thin file consumers increased their score from an ‘F’ (VantageScore 501 – 599) to a ‘D’ (VantageScore 600 – 699).

For those consumers that did not have a prior credit history, 70% of them were able to be scored after the inclusion of RentBureau data into the credit repository.  As a result, fewer consumers will get a “no hit” returned to lenders during a credit inquiry.

Lenders will now have a comprehensive understanding of a consumer’s total monthly obligations to assist with offering credit to emerging consumers.