CBA’s Rent Reporting Policy Stance
Rent Reporting as a Credit Building Solution
- Rent reporting is an evidence-based strategy that can safely help renters with no or low credit scores establish or increase their scores.
- Renters with increased credit scores are empowered to pursue their financial goals, from homeownership and starting a business to accessing more affordable rates on all loans.
- CBA shares its Rent Reporting Center website as the premier resource for those interested in rent reporting as a credit building strategy.
- As an equity-focused nonprofit, rent reporting aligns with CBA’s work to increase access to safer credit building opportunities for historically excluded communities of color who are more likely to be renters and credit invisible.
Give Providers Choice – Opt-In and Opt-Out
- CBA recognizes that affordable housing providers best understand their residents’ needs. To offer residents the greatest opportunity to participate in rent reporting, CBA supports giving housing providers the choice of whether to configure their programs as opt-out or opt-in.
- Based on CBA’s years of experience working with affordable housing providers to launch rent reporting programs, we find that most housing providers choose to offer rent reporting as an opt-in service but currently do not have an option for opt-out based on the interpretation of the Federal Privacy Act of 1974.
- Regardless of the enrollment framework, rent reporting should be offered in a way that clearly explains the benefits and conditions of having their rental payments reported and that confirms a renter’s right to end their participation in the program.
Positive Payments Only
- Rent reporting allows renters to build credit by incorporating a track record of on-time rent payments into their credit reports.
- Negative information concerning overdue rental payments is already incorporated into credit reports and scores through actions including accounts sent to collections and evictions, so positive-only reporting balances out the information available.
- CBA presents information about full-file reporting but believes positive-only reporting to be the best practice.
CBA’s Focus – Affordable Housing
- While rent reporting is increasingly common for all rental situations, CBA will continue its focus on supporting affordable housing providers that are launching rent reporting programs.
- CBA has long recognized the power and potential of reporting rental payments and the opportunity it affords to engage affordable housing residents in credit education and build credit as an asset for all.
- Focusing efforts on affordable housing providers allows them to leverage the power of rent reporting for their residents, whether for reaching their goals or to build credit as an asset for financial stability.
Credit Education – A Recommended Practice
- Whether someone is engaged in rent reporting or not, understanding credit scores amid increasingly complex algorithms and misinformation from credit repair companies is challenging.
- Including credit education as a component of a rent reporting program can enhance the effectiveness of the program and its impact on participant credit outcomes.
- In CBA’s area of focus, affordable housing, rent reporting provides organizations the opportunity to incorporate credit building into their conversations and outreach to residents, even beyond the reporting of rent payments.
- Outside of housing providers that directly integrate credit education into rent reporting programs, rent reporting service providers, landlords, and property management companies should incorporate clear and accessible information about rent reporting and credit to reduce confusion and include people who may not have previously engaged with the credit system.
Sustainable and Reasonable Models
- Affordable housing providers should look to implement reasonable, sustainable rent reporting programs that either cover costs using grant or government funds or aim to minimize the impact on residents. Passing the cost (if minimal) on to residents should be seen as a last resort but is acceptable to ensure program sustainability.