Enrolling in the classes that they want, finding the books that they need and, of course, figuring out what they’re doing with their friends tonight are the immediate short-term goals for most college students.
For long-term success, however, building credit history is a must during young adulthood. Student-housing owners and operators are uniquely positioned to help college students do just that, and help themselves at the same time, by reporting rental payment history.
“Reporting rental payment history is a win-win for students and student-housing operators,” says Brannan Johnston, vice president and managing director of Experian RentBureau, the first major credit-reporting agency to incorporate positive rental payment data in credit reports. “Students get the opportunity to build credit history, while student-housing operators encourage on-time payments and further differentiate their properties.”
Despite how important credit history is to obtaining a mortgage or even a cell phone, a surprisingly large number of individuals today do not have a credit history on file. In fact, there are approximately 64 million people in the United States who don’t have a credit history or enough credit history to generate a credit score, according to Experian. However, in a recent analysis of 20,000 leases, Experian RentBureau found that adding rental payment data to the credit files of the previously “unscoreable” individuals in the study made 100 percent of them “scoreable” using VantageScore 3.0.
“We understand the importance of building credit history and believe that renters should get credit for responsibly paying their rent on time and in full every month,” Johnston says. “Credit history is very important in today’s economy, especially for recent graduates who will be making large credit-dependent purchases for the first time in their lives. Building a credit history during college years can help students obtain valuable credit services — such as credit cards, leases and auto loans — when they graduate.”
In addition, reporting rental payment history helps student-housing owners and operators realize a more steady cash flow. Students know that in order to have a positive rental payment history, they need to pay their rent in full and on time.
The benefits are clear to the property owners and operators that are now contributing rental payment history to Experian RentBureau. Student-housing providers are taking advantage of the benefits — for both themselves and the students they serve — as well by following suit.
Several rental payment services — including RentTrack, WilliamPaid and ClearNow — also furnish rental payment information to Experian RentBureau. These services enable the payment and collection of rent electronically. As an added benefit, residents on the lease can opt in to report their rental payment history to Experian RentBureau.
“Demand for the reporting of rental payment history has been on the rise, as a greater number of consumers are choosing to rent rather than own,” Johnston says. “Renters want the same benefits and conveniences that homeowners receive with mortgage payments.”
It’s a step that student-housing providers are taking to help students build credit history and encourage on-time rental payments, while also realizing more steady cash flow and gaining a competitive advantage.
Peter Jakel specializes in public relations for the multifamily industry. He is an account manager with Denver-based LinnellTaylor and the former director of communications for Archstone. VantageScore is a registered trademark of VantageScore Solutions, LLC.