• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Stock

How on-time rent payments can help ‘credit invisible’ consumers be seen

by July 18, 2024
written by July 18, 2024

Housing is the most considerable expense for U.S. consumers — and while high rents and home prices are obstacles to saving for potential homebuyers, access to affordable credit is another significant roadblock. 

An estimated 50 million Americans are “credit invisible,” according to a 2022 fact sheet from the Office of the Comptroller of the Currency’s Project REACh, or Roundtable for Economic Access and Change. That means they don’t have a credit file and lack a credit score and, as a result, find it challenging to qualify for a mortgage, credit card or other financing.

″‘Credit invisible’ is someone who hasn’t interacted with the credit system. They either have no credit file or a thin credit file,” said Priscilla Almodovar, the CEO of the housing financing agency Fannie Mae. “So that impacts people who want to buy a home, and that could be people new to this country; it could be Black, Latinos and young people, the millennials, driving this housing demand.”

Still, consumers with thin credit files may have a history of paying rent on time — a factor mortgage financing provider Fannie Mae started to count in late 2022. Its Positive Rent Payment Reporting initiative, which has been extended through the end of 2024, allows people renting in eligible properties to have their rent payments counted by credit rating agencies at no cost. 

“We’re now able to level the playing field and make access to credit something that’s available to many more consumers,” Almodovar said. 

Having little or no credit is a major stumbling block to getting a mortgage. It also prevents consumers from getting attractive rates on all types of loans.

Rent payments can be one way to gain credit visibility.

Fannie Mae’s free program works with providers Esusu Financial Inc., Jetty Credit and Rent Dynamics. There are many other players in the market, too. Experian Boost reports rent payments for free as well as payments for utilities, mobile phones and streaming services. Other rent-reporting firms — including Boom, Rental Kharma, RentReporters and Self — also can provide your rental payments to one or more major credit bureaus for free or a modest fee by allowing access to your bank statements. 

When rent payments are included in credit reports, consumers see an average increase of nearly 60 points to their credit score, according to a 2021 TransUnion report.

Fannie Mae’s pilot program has helped more than 35,000 people establish credit scores, the agency reports. Participants who already had a credit score and saw an improvement had an average score increase of up to 40 points, according to Fannie Mae.

Florida resident Joe Grande, 56, who works as an inventory control clerk, saw a credit boost of 80 points in his first three months, to 660, after signing up for free reporting from his landlord through rent reporting company Esusu, a vendor that works with Fannie Mae. He says the program has helped keep him on track toward his goal of buying a home.

“It makes me feel like I’m in control, but it also makes me want to make sure everything else is paid on time,” Grande said. 

Experts say the impact on your credit can be significant. “What it accomplishes for you, adding 24 on-time payments, it’s like jumpstarting your car with a truck battery,” said Martin Lynch, president of the Financial Counseling Association of America and education director at the non-profit Cambridge Credit Counseling in Agawam, Massachusetts. 

While these programs can help build credit more quickly, experts caution that it takes time to establish a track record.

It typically takes six months to create a credit profile and longer to establish a solid track record of repayment, experts say. Credit scores generally range from 300 to 850 — and lenders generally view a credit score lower than 670 as a higher risk.  

“For somebody with a 680, they’re going to be able to obtain financing, but it’s typically not going to give them access to the lowest interest rates and the best deals,” said Bruce McClary, a senior vice president at the National Foundation for Credit Counseling. 

It’s also important to carefully review the costs and terms of the rent-reporting company you want to use. While the Fannie Mae pilot provides only positive payment history to all three credit bureaus at no cost, consumers using rent reporting outside of that should clarify if there information is being reported to all three of the biggest players: Equifax, Experian and TransUnion.

“If your good payment history is being reporting to one of the three, that can be less impactful than if reported to all three credit bureaus,” said Matt Schulz, chief credit analyst at LendingTree.

This post appeared first on NBC NEWS
0 comment
0
FacebookTwitterPinterestEmail

previous post
Ford to spend $3 billion to expand large truck production to a plant previously set for EVs
next post
Should you buy Abbott stock? CEO sees multi-billion dollar opportunity in new product

related articles

Walmart boosts sales outlook as it says tariff...

August 21, 2025

How a ship that glides like a pelican...

August 21, 2025

Apple just landed a key win for the...

August 20, 2025

Best Buy launches third-party marketplace as it looks...

August 19, 2025

Group accused of using fake accounts to buy...

August 19, 2025

Playboy moving its headquarters to Miami Beach and...

August 17, 2025

Lyft co-founders to step down from ride-hailing firm’s...

August 16, 2025

Warren Buffett’s Berkshire Hathaway reveals new stake in...

August 16, 2025

Apple Watch getting redesigned blood oxygen feature following...

August 15, 2025

The CEO in chief: How Trump is getting...

August 15, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Lauren Sanchez tones down look after backlash for racy inauguration outfit

    January 21, 2025
  • Trump says Israel and Iran ‘have to fight it out’ but believes deal is possible

    June 16, 2025
  • Longtime Trump loyalist flips on GOP’s ‘big, beautiful bill’

    June 5, 2025
  • Jim Jordan subpoenas company led by daughter of NY v Trump judge

    August 28, 2024
  • Companies are slashing prices to woo consumers. It’s working.

    July 28, 2024

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 3

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (5,783)
  • Investing (634)
  • Stock (893)

Latest Posts

  • This California startup is cleaning water and removing CO₂ from the atmosphere — all at a reduced cost

    June 5, 2025
  • Novartis (NVS) Stock: A Comprehensive Guide for Investors

    August 23, 2024
  • Microsoft’s mammoth AI bet will lead to over $100 billion in data center leases

    October 2, 2024

Recent Posts

  • Turkish tourists flock to Greece amid skyrocketing inflation at home

    July 22, 2024
  • Gold and silver: Gold continues its steady growth

    September 6, 2024
  • Experts sound alarm on Biden’s offshore drilling ban having reverse effect on environment: ‘Disgraceful’

    January 15, 2025

Editor’s Pick

  • Trump warns Israel strike on Iran ‘could happen’ amid Middle East evacuation, nuclear negotiations

    June 12, 2025
  • With 25 days until voting starts, ‘election season’ kicks off sooner than you think

    August 12, 2024
  • House Dem fumes over Musk’s DOGE crackdown during fiery interview: ‘I’m pissed’

    February 14, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock