USA Today reports that renting an apartment or other residential rents is now a viable way to improve users’ credit ratings. According to Janna Heron from USA Today, Goldman Sachs will be launching its pilot program which helps include rental payments to a consumer’s credit history.
The financial services company is currently working with the Credit Builders Alliance in developing a rent reporting tool. It is also coordinating with a property development entity from Salt Lake City.
This program aims to help low-income individuals and renters, especially those who struggle getting higher ratings. These people are likely to be denied loans or other applications. Should they be considered for these financial services, it is possible that they get disadvantageous terms.
John Olson from Goldman Sachs says that the initiative seeks to incorporate rental in credit reports. However, the greatest challenge to this is gathering data to be included in reports. With this program, Olson remarked that property managers will result in minimized difficulties when reporting rent payments.
Those interested to enter this program are encouraged to talk with their landlords to create an agreement to utilize this program. However, USA Today noted that one of the biggest hurdles that renters will have to get through is convincing their landlords to participate.
Meanwhile, Olson says that property managers and landlords should use Goldman Sachs’ pilot service to “show that they do care and want their residents to thrive.”
In a test-run where at least 32 renters and the property management of Giv’s Development signed up, the program showed a 42-point increase in the credit scores of the participants. This number is better than previous pilots which resulted in a 23-point increase.
According to reports, the improvement immediately takes place. This offers a better option as compared to other credit score improvement tactics.