Zillow Launches New Reporting Feature To Help Renters Build Credit

Key Takeaways:

– Zillow has launched a new program to help renters build credit through their monthly rent payments.
– Renters who pay their rent through Zillow will have their on-time payments reported to a major credit bureau.
– Late payments will not be reported.
– The program aims to address the significant gap in credit reporting for renters in the United States.
– Approximately 26 million Americans are currently “credit invisible” and lack any recorded credit history.
– The divide in credit access is particularly prevalent in Black communities.
– Building credit history is essential for unlocking broader financial opportunities such as credit cards, better rates for home purchases, and easier loan approvals.

inman:

The new feature will allow renters who pay their rent through Zillow to have their on-time payments reported to a major credit bureau.

A new program launched by Zillow aims to help renters build credit through the transaction they begin every month with — their rent.

The new rent reporting feature will allow renters who pay their rent through Zillow to have their on-time payments reported to a major credit bureau, giving renters who may have been deprived of such opportunities previously a way to build credit, the company announced on Wednesday.

“Every on-time rent payment is a testament to a renter’s reliability, yet it’s often overlooked in credit reports, and we want to change that,” said Michael Sherman, vice president of Zillow Rentals. “This new program is all about acknowledging and supporting consistent financial habits. It ensures renters’ largest expense can now work in their favor and potentially help them on their path to finding and securing a place they can call home.”

Renters who opt in will have their on-time rental payments reported to the major credit bureau Experian. Late payments, defined as payments more than 30 days overdue, will not be reported.

Enhancing one’s credit history is an essential step in unlocking broader financial opportunities such as credit cards, better rates for home purchases, future rentals and easier loan approvals.

The program was launched with the acknowledgment of a significant gap in credit reporting. While renters in the United States spend hundreds of billions of dollars on rent each year, most of these hefty payments go unreported. Approximately 26 million Americans are currently “credit invisible” according to the Consumer Financial Protection Bureau, meaning they lack any recorded credit history.

The divide is particularly prevalent in Black communities, where a lack of access to credit locks many residents out from homeownership opportunities and traps them into a cycle of paying more for rent than they would for a mortgage — a holdover from racist redlining policies of the 20th century. In New Orleans, for example, the median tenant in a credit-insecure area spends 77.5 percent of their income on rent, as opposed to 28.6 percent of their income for a typical mortgage, according to Zillow data.

Email Ben Verde


Source link

Property Chomp's Take:

Zillow Launches New Reporting Feature to Help Renters Build Credit

Zillow, the online real estate marketplace, has launched a new program aimed at helping renters build credit. The program allows renters who pay their rent through Zillow to have their on-time payments reported to a major credit bureau.

Every month, renters make a significant financial transaction by paying their rent. However, these payments are often overlooked in credit reports, leaving renters with limited opportunities to build credit. Zillow's new rent reporting feature aims to change that by giving renters a way to establish a positive credit history.

Michael Sherman, Vice President of Zillow Rentals, explained the motivation behind the program, stating, "Every on-time rent payment is a testament to a renter's reliability, yet it's often overlooked in credit reports, and we want to change that. This new program is all about acknowledging and supporting consistent financial habits. It ensures renters' largest expense can now work in their favor and potentially help them on their path to finding and securing a place they can call home."

Renters who opt into the program will have their on-time rental payments reported to the major credit bureau, Experian. Late payments, defined as payments more than 30 days overdue, will not be reported. This feature allows renters to enhance their credit history, opening up opportunities for better rates on loans, credit cards, future rentals, and even home purchases.

The program was launched in recognition of a significant gap in credit reporting. Despite spending billions of dollars on rent each year, most renters in the United States do not have their payments reported to credit bureaus. As a result, approximately 26 million Americans are considered "credit invisible," lacking any recorded credit history.

This divide is particularly pronounced in Black communities, where a lack of access to credit prevents many residents from becoming homeowners. These communities often end up paying more for rent than they would for a mortgage, perpetuating a cycle of financial inequality. For example, in New Orleans, the median tenant in a credit-insecure area spends 77.5 percent of their income on rent, compared to 28.6 percent for a typical mortgage, according to Zillow data.

The new reporting feature from Zillow aims to address this disparity by providing renters with a means to build credit. By reporting on-time rental payments, Zillow hopes to empower renters and help them overcome barriers to financial success.

In conclusion, Zillow's new rent reporting feature is a step towards creating a more equitable financial landscape for renters. By acknowledging the importance of on-time rent payments and reporting them to credit bureaus, Zillow is giving renters an opportunity to build credit and improve their financial standing. This program has the potential to open doors to better financial opportunities and break the cycle of financial inequality that many renters face.

Leave a Reply

Your email address will not be published. Required fields are marked *