Single-Family Rental Home Providers Helping Residents Build Positive Credit History

Programs may boost credit scores for those making on-time rent payments

NRHC staff report
February 15, 2024

Single-family rental home providers are taking considerable steps toward helping residents improve their credit scores and, in some cases, remove their “credit invisible” status by working with service providers who report on-time rental payments.

By doing so, residents potentially see an increase of 20 to 100 points on their credit scores if their rental history does not contain any late payments, according to one single-family rental home provider. For residents without an existing credit score, they can potentially achieve one in the mid-600s simply by adding on-time rental payments to their credit file.

By improving their credit scores, residents can be granted improved access to credit, mortgages, and other financial services that were previously out of reach.

Progress Residential, for one, initiated a customer policy in the first quarter of 2022 through leading fintech company Esusu’s financial health rent reporting platform and 99% of its residents have opted in. Through 2023, more than 7,800 residents established a first-time credit score.

This achievement is a significant milestone for Progress Residential residents, as they transition from no longer being credit-invisible to actively building their financial independence.

In late 2023, the National Rental Home Council (NRHC) entered a partnership with Esusu to offer rent reporting services to all NRHC members.

Samir Goel and Wemimo Abbey, Co-Founders and Co-CEOs of Esusu, said that by joining forces with NRHC, they “aim to catalyze significant strides towards our vision of bridging the racial wealth gap and paving pathways to prosperity for residents in single-family rental homes.”


Nearly Six in 10 Seeing a Credit Score Boost

Progress Residential said that 53% of its residents experienced an improved credit score, with those living in some states (Maryland and Minnesota) reaching the 60% threshold.

Progress Residential actively promotes its rent reporting policies as a notable benefit of choosing its properties. It utilizes email campaigns and publishes information on its website to inform and educate potential residents about the reporting program’s advantages.

Miles Adams, Chief Operating Officer of ARK Homes for Rent, said his company also partners with Esusu and residents receive an introductory brochure about the program and are enrolled automatically at move-in.

To date, the average resident credit score has been boosted by about 30 points over the reporting period since implementation in January 2023, Adams said.

“Our residents appreciate the benefit of this program as some aspire to eventually own their own home,” Adams said.

Kyle Scheiner, Partner, Romer Debbas, who provides legal counsel and representation to clients in various aspects of transactional real estate and real estate financing, said renters can turn their rental payment history into positive credit marks on their credit reports because landlords are able to report rent payments to the credit bureaus like any other creditor.

For many, “rent payments are the only way for a person to boost their credit scores,” Scheiner said. “These types of renters typically are living off their debit cards and take public transit to get around and thus don’t have the opportunity to positively build their credit.

“By reporting the payment history, the landlord is helping their tenant get access to basic consumer credit items such as car loans and credit cards.”


Congress Working at Improve Residents’ Credit Scores

Legislation is being considered to help millions who are without credit. U.S. Senator Tim Scott (R-S.C.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, and Senator Joe Manchin (D-W.Va.) in May reintroduced the Credit Access and Inclusion Act to responsibly expand credit access to those with limited or non-existent credit histories.

This bipartisan legislation would permit property owners to report payments data to credit reporting agencies, allowing consumers with an established track record of paying their bills on time the opportunity to develop a positive credit history.

“If you pay your bills on time, your credit score should reflect it,” said Ranking Member Scott. “Americans shouldn’t be held back from purchasing a home, financing their education, or pursuing their dreams simply because their on-time payments don’t happen to count towards their credit scores. This bill will remove needless barriers and help hardworking Americans gain access to credit.”

Good credit is a gatekeeper to the American dream, Manchin said.

“However, the current system denies many individuals who pay their bills on time the opportunity to establish a credit score,” Manchin said.

“This bipartisan legislation would remove regulatory barriers and allow additional data, such as utility and rental payments, to be used to build credit. I urge my colleagues on both sides of the aisle to support this commonsense bill and help those who are ‘credit invisible.’”