Millions of renters do not have access to the financial mainstream because rental payments are either not reported to consumer reporting agencies, or not scored by lenders, or both. A recent story in Next Mortgage News highlights this point from Laurie Goodman. The story called Goodman, “Wall Street royalty” for, among other things, her work as senior managing director at Amherst Securities Group, LP, a boutique broker/dealer specializing in securitized products, where her strategy effort became known for its analysis of housing policy issues.
In the NMN story, Goodman said, “I think it’s a big omission that the version of credit scores that are used for mortgage origination includes no rental payment history.” The story adds:
New versions of credit score models do try to incorporate rent payment history when it is available. But it is missing most of the time, as landlords don’t have to report this data and the credit bureaus don’t have access to a consumer’s bank account data, which would include rent payments.
Eric J. Ellman is Senior Vice President for Public Policy and Legal Affairs at the Consumer Data Industry Association (CDIA) in Washington, DC. He also served for eight months as Interim President and CEO of the Association. More