Rental payments have become instrumental in helping consumers raise their credit scores. And property managers can a play role — while helping themselves in the process.
A recent Wall Street Journal article listed rental reporting as one of “three programs to boost your credit.” (“9 Myths About Credit Scores.”) TransUnion created a program called ResidentCredit® to aid in this quest, and company Vice President, Maitri Johnson, was quoted in the article as saying they have, “found subprime renters — on the lower scale of credit scores — when they make timely payments, can improve their score by 18 points over 6 months.”
The challenge for renters, however, is the task of rental reporting is often left to landlords and property management companies, rather than consumers. This could realistically push increasingly conscientious renters to look for properties that offer such a service.
Doing well by doing good
Rental reporting just makes good business sense for property management companies. Helping residents raise their credit scores is a nice thing to do that can potentially boost your bottom line by cultivating appreciation and loyalty. Considering that a large percentage of your current residents are likely Millennials, perhaps on the cusp of buying a home, offering this benefit may entice them to stay at your property until they’re ready to become homeowners.
You should also consider this tactic smart marketing that can help you stand out from your competitors. By telling potential residents that you report credit payments — which can either help or hurt their credit — you’re may be more likely to attract higher quality renters who’ll be more apt to pay on time. The fact you’re willing to help residents improve their credit scores is a key benefit you can advertise on your website and across your promotional materials.
Rental reporting is simple, cost-effective and can make a real difference
In addition to helping you engage and retain better residents, reporting rental payments can reduce delinquencies and increase your overall cash flow. But the real beauty lies in enabling people to enhance their financial lives (or put them back on track) by actually improving their credit scores.
As mentioned above, TransUnion found renters with lower credit scores can improve their score by 18 points over 6 months — if they make their rent payments on time. Sixty percent of renters could see their scores increase after only one month — but only if their diligence is being reported. And with TransUnion ResidentCredit, that’s not only possible, it’s easy and doesn’t cost you anything.
To learn how you can start helping your residents improve their credit scores, read more about ResidentCredit here.