Reporting consumer credit data to the NCRAs (National Credit Reporting Agencies) is not mandated in the U.S. Many, if not most, single and multifamily landlords utilize credit scores when determining potential renters' creditworthiness. Yet relatively few see the merit of contributing data back to the agencies. They are missing an opportunity to influence the tenant’s behavior relative to regular and on-time payments while doing them a disservice and not fully supporting the consumer data reporting ecosystem.
In their whitepaper “The Impact of Consumer Data Reporting,” Experian PLC, a multinational consumer credit reporting company, discusses the crucially important role of consumer credit reporting and credit scores for consumers. Today’s consumers are better educated and far more savvy when it comes to complete and accurate data furnishers' reporting. They understand the impact of their overall creditworthiness and the benefits that accrue to those in good standing.
The consumer reporting ecosystem works best when all three participants are actively involved:
・Lenders/data furnishers providing quality, accurate, and complete reports.
・NCRAs becoming more transparent - enabling consumers to ensure their credit information is accurate.
・Consumers taking a more active role in monitoring their credit history through industry resources such as CreditKarma.com and FreeCreditReport.com.
Since credit reports impact so many decisions in a consumer’s life, they are becoming more vocal and demanding that their reports reflect their full credit activity. They rely upon their credit providers to present their data to the NRCAs to impact their overall credit standing. Having a complete and robust credit report, even with minor issues, is crucial. Consumers can review their data and determine the necessary steps to improve their scores to qualify for more favorable and affordable treatment in the future.
Benefits of a Favorable Consumer Credit Score
Significant benefits accrue to those consumers with favorable credit reports and higher credit scores. Loan approvals are more convenient and at more favorable rates:
・Private Student Loans
・Rental Housing – As mentioned previously, the rental industry uses credit reports extensively when vetting potential renters. For many renters, this is their first credit experience, and accurate reporting sets them up for future loans at better rates and provides content they need to secure employment.
In some states, insurance premiums are impacted by credit scores
・Premiums for Auto Insurance
・Premiums for Homeowners Insurance
Another area outside the normal sphere of credit reporting is qualifying for employment.
・Job Applications – 60% of HR Managers use credit reports to screen applicants.
Not directly related to credit scores, but an important element of complete and accurate reporting is identifying and preventing identity theft.
Data furnishers need to be cognizant of the crucial importance their data contributions make in their customers' lives.
Sperlonga™ Data and Analytics – Rental Payment Credit Reporting
Although the Fair Credit Reporting Act does not mandate credit reporting, it does require complete and accurate reporting once a data furnisher participates in the process. Navigating the rental customer relationship as well as legal and regulatory requirements requires a process and a solution.
Single and multifamily landlords can benefit from the Sperlonga™ Solution in rental credit reporting – a win/win process that reduces delinquencies and rewards those renters with on-time payments by improving their credit scores – Sperlonga™ is the solution that works!