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Renting Guarantees a Mortgage
Jan 12, 2012

Rental history: More important in getting a mortgage

NEW YORK – Jan. 11, 2012 – Borrowers who have a history of paying rent on time may see a boost to their credit score.

Experian, a leading credit report company, added a section to its credit reports last year that reflected on-time rent payments, which helped give a boost in the credit scores to some on-time rent payers. Now the two other major credit-reporting companies are following suit.

CoreLogic and FICO recently announced that they’re also adding a score that reflects payment histories from landlords, The New York Times reports.

“Evidence of positive rental payments could be a plus for consumers,” Joanne Gaskin, FICO’s director of product management global scoring said.

Nearly half of high-risk consumers saw an increase of 100 points or more after their rental history was added to their credit report, says Brannan Johnston, the managing director of Experian’s rent bureau. Consumers with average or higher credit scores, on the other hand, did not see any major difference.

The change also benefits former homeowners who went through a foreclosure. They may be able to rebuild their credit histories quicker now by showing they are “very responsible renters,” according to Tim Grace, senior vice president of CoreLogic.

Source: “A Good Rental History Can Help Borrowers,” The New York Times (Jan. 5, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

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