Entities

Department of Housing and Development (HUD) (1)

Policy and Economic Research Council (PERC) (7)

Topics and Issues

Alternative Data (3)

Financial inclusion (2)

Rental reporting (1)

Residential screening (1)

In February 2020, HUD and PERC, a global consulting firm, released a study examining how reporting rent payments made by thousands of HUD-assisted households to nationwide consumer reporting agencies would impact the credit standing of these families. This ground-breaking study, Potential Impacts of Credit Reporting Public Housing Rental Payment Data, found that if the rent payments of HUD-assisted families are reported to consumer reporting agencies, many more consumers will be elevated from being “credit invisible” to the financial mainstream.  The study looked at rental data from three Public Housing Authorities (PHAs), the Housing Authority of Cook County (Ill.); the Louisville (Ky.) Metro Housing Authority, and the Seattle Housing Authority (Wash.).  When positive and negative rental payment history is share by a PHA to a consumer reporting agency, 23% or 61% of tenants had credit scores increase, depending on the scoring models used.  Not only do scores increase with positive and negative rental payment reporting, but more consumers can enter the financial mainstream with rental payment reporting.  When rent payments are reported to CRAs, unscorability fell from 49% to 7% in one model and fell from 11% to zero in a second.

HUD press release: New Report Explores the Problem of ‘Credit Invisibility Among HUD-Assisted Households.

WSJ coverage: Counting Rent Would Improve Credit Scores of Public Housing Residents, Study Finds.