Experian, one of the big three US credit bureaus, began to add rent payment data to its consumer files in December 2010, in an initial move to improve data for thin file consumers. Data will be limited to start:
Experian said only positive rental information is currently being reported. Negative data, such as missed payments, will be added in 2012.
The company said the number of consumers affected by the new information is in the “low millions.”
That’s because Experian draws its rental payment information from a network of just 45 property management companies that cover about 8 million residents. The inclusion of continuous, on-time rental payments boosts the profiles of a significant number of those residents, Experian said.
This move is potentially the start of improved information for first-time borrowers who may have more of a rent payment history than a credit payment history, addressing a concern expressed over the years by consumer advocates. Of course, incorporating new information into credit decisioning is a separate process, but over the long run, if millions of consumer files contain predictive data from rent payments, the incentive to build such decisioning could become significant.