City Comptroller Promotes Program to Help Tenants Lift Credit Scores
Scott Stringer, New York City comptroller, recently issued a report encouraging owners and property management companies to give tenants the ability to opt in to reporting their rent payments as a way to boost their credit scores. Looking at a sampling of tenants paying less than $2,000 a month, Mr. Stringer’s office found that 76 percent of them would see their credit scores improve if their rental payments were included. An additional 18 percent of tenants would probably see no material change to their credit score but would gain additional depth to their credit report. Six percent of renters would see a decline in their scores.
The Comptroller’s Office is launching conversations with a wide range of stakeholders – tenants, banks, building owners, and more – to consider how to make this a reality and determine how to make New York City the first in the nation to get it done. According to the office, a number of policy changes that would make it easier for New Yorkers to report their history of paying rent in full and on time to credit bureaus include:
- Helping landlords and property managers provide opt-in programs that give tenants the option to let their landlord report rent payment information to credit bureaus. The city should explore policies to incentivize these programs.
- Urging banks and credit unions to leverage innovative strategies to identify rent payments and report them to credit bureaus. Suggestions include serving as an intermediary where the bank or credit union collects rent checks, verifies them against a lease, reports them to a credit bureau, and then sends the payment to the landlord for those New Yorkers who opt in.
Comptroller Stringer is also urging the city to take a number of steps, including:
- Allowing all NYC Housing Authority residents to opt in to a credit reporting program. That could be done by expanding an existing pilot partnership NYCHA has with the Brooklyn Cooperative Federal Credit Union and Urban Upbound Federal Credit Union, which allows tenants to opt-in to report their rent payments to credit bureaus. That program could be scaled to the entire housing system.
- Exploring incorporating rent into its low-income housing programs by incentivizing and informing developers of low-income housing about ways to develop a rent-reporting program.
- Proactively using its Department of Consumer Affairs to develop credit-building curriculums that assist renters considering opting into a rent reporting program.
- Implementing a number of credit-related consumer protections, including adjusting credit scoring models so that credit checks undertaken by landlords on prospective tenants will not negatively impact credit scores.
- Passing legislation to require landlords who run credit checks on prospective tenants to share credit reports with the applicant and increase consumer credit education initiatives offered by the city.