Costa Mesa, Calif.-based global information services company Experian recently acquired RentBureau, a widely used credit bureau in the multifamily industry. Experian will now be provided with a more comprehensive database of rental payments, which will make rental payment history an integral component of the credit agency's reporting, "significantly helping the 1/3 of the United States that rents,” says Eric Hartz, President and CEO of the Atlanta-based Decision Services International, the parent company of RentBureau.
RentBureau, which was launched in 2005 specifically to serve the multifamily industry, provides rental history to property owners and managers, as well as rental screening companies. “I anticipate that the amount of rental data captured will accelerate with Experian’s ownership," Hartz says. "The value of this rental history data warehouse increases significantly [with the acquistion], and ensures that rent payment history continues to be an important part of screening."
Brannan Johnston, Vice President and Managing Director of RentBureau, agrees. “This acquisition will only enhance the screening process by using the brand and scale of Experian to grow the RentBureau database more effectively,” Johnston says.
With the acqusition of RentBureau, Experian will now have functionality to allow a person’s rental history to count towards their credit score. Incorporation of rental payment history into tradtional credit reporting gives those looking to lease an apartment a boost if their rental history is good and if the report shows payments made on time. The combined factors also allow owners and managers the chance to weed out applicants with less desirable rental histories. RentBureau, according to Experian, is the nation’s largest credit bureau for the multifamily industry, serving as a neutral repository of this type of data that is then made available to all resident screening agencies to augment traditional credit and background checks.
Experian estimates that there are 30 million renters who are currently not scorable through the traditional credit bureaus. “About 90 percent of renters are good renters, yet many are not identified as such since rent does not often make it into the screening process and consumers who have thin or no credit files often find it very difficult to qualify for a lease," says Hartz, who anticipates more screeners availing themselves to Experian's services as it continues to capture even more rental data.
According to Hartz, the multifamily industry loses approximately $3 billion to $5 billion each year due to bad debt from late, skipped, and unpaid rent, and rental payment history is the best way to predict which residents are likely to complete their agreed leases. Experian hopes to reduce the industry’s overall loss by “allowing property managers to comfortably offer leases to beyond those who are scorable, while enacting obstacles for rent skippers to get access to other apartments,” Johnston says.
Experian plans to continue to pursue partnerships with other rental screening companies. Says Johnston: “We are thrilled to enter this new marketplace.”