Rent Reporting is a new thing, so when it comes to figuring out what type of impact rent reporting might have on your credit score, a solid answer might be hard to come by. Some studies have been done by the major credit bureaus. Experian, for example, found that rent reporting helped 100% of previously unscorable residents to become scorable. TransUnion’s analysis found that nearly 41% of subprime consumers saw their VantageScore increase by 10 points or more after just one month of rent reporting. Now that RentTrack has been reporting to two credit agencies for over half a year, we decided to do our own review.
First, we looked at a random sample residents with at least 2 months of rent history, and a maximum of 6 months of rent payment history. When users started reporting, we recorded their score on that date. Scores were then re-pulled for all participants in the review on January 23rd, 2015. We then calculated the difference in their finishing and starting scores, and averaged their change as a whole. We then isolated those who started with a Vantage Score below 650, and calculated the same average change. Finally, we looked for any resident that did not have a score to start, to see if they had a score at the finish. For that group, we averaged their “new score” to see where residents might start out if rent were the only tradeline on their credit report. We did not (and could not) account for changes that may have happened independently — such as reporting by other companies and creditors. However, the sample size and the aggregate average should reduce the risk of error based on any outliers that might have been introduced into the sample.
Here’s what we found:
Residents who reported rent went up an average of 9 points on the tri-bureau Vantage Score.
For subprime consumers, or those with credit scores below 650, the average point increase was 29 points.
100% of residents without a score became score-able, with an average starting Vantage Score of 639.
This is big news for renters who are just starting out in the world of credit. Scores went up and down, depending on what else was happening on a consumer’s credit file, but overall, rent reporting seemed to have a positive effect. This is also welcome news at a time when rental populations are booming in major cities across the US. Finally, this data is also consistent with the bureau studies mentioned above, which indicates that we’re zeroing in on the answer to how rent reporting might impact your score.