NAA/NMHC Weigh in on Behalf of Renters Calling for Expanded Credit Scoring Models
NAA/NMHC have submitted comments for the record at a Senate Banking Committee hearing entitled “An Overview of the Credit Bureaus and the Fair Credit Reporting Act.” The hearing was the latest in a series of congressional reviews focused on consumer and credit reporting issues. In the wake of last year’s massive Equifax data breach, lawmakers continue to focus their attention on regulatory oversight of consumer reporting agencies, data security practices and how consumer data is reported and used. The multifamily industry relies heavily on accurate consumer and credit reporting and utilizes that information to conduct daily business operations at apartment communities.
Historically, credit scores and reports have not accounted for rent, utility or other consumer payments thereby often limiting the financial profiles of many Americans, especially renters. NAA/NMHC urged lawmakers to support broader adoption of alternative credit scoring models that would account for these on-time positive transactions to be recorded on an individual’s credit report and thereby help them build a credit profile that allows them to attain the many benefits that come with it.
Bipartisan legislation introduced by Senator Tim Scott (R-SC) and Senator Joe Manchin (D-WV), which clarifies that alternative data, such as utility and rent payments, can be accounted for on a consumer’s credit report was also discussed at length. Similar legislation has already passed the House of Representatives unanimously and Senators pressed Committee leadership for similar action. Many apartment owners and operators already report rental payments via third-party service providers, but this legislation would further its acceptability and continue their voluntary nature.
Apartment living now attracts a wide variety of Americans and will continue to do so making it more important than ever to modernize credit reports and scoring models so that our nations renters from being put at a financial disadvantage. NAA/NMHC submitted similar comments and recommendations to the Federal Housing Finance Administration (FHFA) earlier this year.