November 27, 2022

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Fannie Mae plan boosts renters credit scores

Fannie Mae plan boosts renters credit scores

Exclusive: Fannie Mae’s plan boosts renters credit scores

  • Only positive payments will be reported to tenants (those behind will be disqualified) and tenants can choose to opt out at any time.
  • One in ten adults in the United States, or about 26 million people, has “credit invisible,” which means they have no credit history with one of the three credit reporting companies nationwide.
  • A study by the Urban Institute indicates that renters are seven times more likely than homeowners to lack a credit score.

When it comes to credit scores, renters are at a disadvantage compared to homeowners.

While mortgage payments are reported by lenders to credit bureaus, landlords typically do not report rental payments—and this can hinder tenants’ ability to build a credit history.

Fannie Mae plans to subsidize the cost of multifamily homeowners it funds to help renters build their credit starting Tuesday, as the mortgage giant partners exclusively with USA TODAY.

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