New research from TransUnion has found a 37% increase in the number of property managers who said they reported rent payments to credit agencies in 2022. The research includes the results of two surveys from over 150 property management executives and 3,301 current renters.
Following the emerging trend, 48% of those who now report rent payments began doing so in 2022. Top reasons cited for reporting rent payments were to help residents build credit scores at 86%, encourage residents to pay on time at 52%, and attract renters who are financially responsible at 35%.
“It’s exciting to see this kind of movement among property managers toward rent payment reporting. The findings also illustrate that the property manager-tenant relationship is more than transactional—most property managers who report rent payments are doing so to help their residents improve their financial futures,” says Maitri Johnson, vice president of tenant and employment screening at TransUnion. “Clearly, awareness of this valuable credit report asset is growing, and we hope to see even broader adoption of rent reporting going forward.”
For those who do not report rent payments, 54% selected “other” among the list of common reasons and 32% indicated they were in the process of setting it up or were already doing so through a third-party data provider. Of the benefits that nonreporting property managers find convincing, the top reason (85%) would be to attract renters who pay on time.
“I think we’re seeing a change in perspective among property managers in that they increasingly see rent payment reporting as an important and attainable value-add they can provide renters, a new amenity that can not only support good payment behavior but also be valuable in new renter acquisition,” says Johnson.
Sixty-two percent of property managers who report payments said the setup process was somewhat easy or very easy, while 43% who do not report rent payments expected that to be the case—an increase from last year’s 28% who expected it to be an easy process.
While all generations are equally aware of the possibility of having rent payments being reported, Gen Z renters have theirs reported at 21% compared with millennials at 13%, Gen X at 9%, and baby boomers at 4%. Of those who have had their rent payments reported, 80% said their credit scores increased as a result, and, for younger renters, because of the higher reporting rate, 86% cited a credit score increase.
Findings revealed that 58% of renters are more likely to rent from someone who reports rent payments, and the percentage is higher for Gen Z at 68% and millennials at 64% who prefer a property manager that reports rental payments.
If payments were potentially reported, 82% of all renters said they would be more likely to pay rent on time. “Having rent payments reported is an attractive option for most renters, so property managers who participate should really leverage that benefit in their advertising and highlight it in their lease agreements,” says Johnson. “Property managers who are on the fence should understand that the practice is a win-win for both parties, as it attracts responsible renters and rewards them for on-time payments.”
Because the number of renters who said they have their rent payments reported to credit reporting agencies decreased slightly and the number of renters who were unsure of whether their payments get reported increased proportionately, the report found a need for clearer communication between property managers and renters.