If you’re like me and always stressing about the monster under your bed–the credit report–you’d probably want to know that Experian has decided to add your apartment retal history to your credit report. The credit reporting agency recently announced that they added millions of apartment rental accounts to their credit file database in December 2010.
For years, decades in fact, the only time an apartment rental account would show up on a credit report was after the property management company sent it to collections. The collection agency would then report it to the credit bureaus. So, this marks the first time positive apartment experience has been reported to one of the major credit reporting agencies.
This is good news for a variety of reasons. First off, it signals a willingness by one of the Big 3 credit bureaus to step outside of their “financial services” comfort zone and add something other than credit cards, mortgages, and auto loans. This is no small matter. Any time something new is added to a credit report, the furnisher of the data (who is also Experian since they acquired RentBureau) is exposed to potential liability and a slew of Fair Credit Reporting Act obligations.
The second piece of good news is the number of people who now have a legitimate Experian credit file but didn’t prior to the addition of the rental account. Regardless of your opinions about credit bureaus, people are much better off having a credit report than not having a credit report. Having a credit report is essentially a ticket to doing business with mainstream lenders, which means better access to credit and better terms.
Right now, people who do not have credit reports can’t get loans from banks or credit unions because there is no real way to assess their risk. They’re largely relegated to pre-paid debit cards, check cashing stores, payday lenders, pawn lenders and title lenders. That’s an expensive way to live.
This definitely seems like good news especially if you’re struggling to find an apartment in the expensive cities like New York, Boston and San Francisco. Good luck apartment shopping!