Realizing the Rent Reporting Opportunity for Apartments

Now that more apartment dwellers choose to pay rent online, renters need and want a direct connection between on-time housing payments and a boost in their rating with credit bureaus.

Surprisingly, just under 50% of renters are still unaware that paying rent on time can build credit, according to a recent survey from RealPage^® — despite the finding that 87% of American renters think paying their rent on time should improve their credit score. With rent as the largest monthly expense amid rising costs for all necessities, today’s renters value the option to be rewarded for paying rent on time.

However, according to the nonprofit research group Urban Institute, rental data appears in credit files for fewer than 5% of the roughly 80 million adults in rental housing. Transunion recently found that nearly half of the property managers who report rent started doing so in 2022. With numbers up among property managers reporting rent and renters more savvy about the value of rent reporting, why aren’t more apartment residents benefiting — and what will it take to resolve the disconnect?

Breaking down barriers to reporting rent payments

While rent reporting usage appears to be on the rise, confusion from both renters and properties may explain why demand is not being met for more than three-quarters of renters who experience challenges due to poor credit:

• Renters may assume they already have it — and don’t know they must request it
• Operators are unsure how to enable, promote or benefit from the service

Understanding the scope of these win-win advantages can help identify how every community can seize the latent opportunity in rent reporting.

Renters win with:

• Credit-building benefits for renters of every social and economic status with more financial opportunities
• Low-cost, automated rent reporting option available from the property that supports individual financial milestones and goals
• Historical “back reporting” (for an additional cost) that helps longtime renters expand credit-boosting benefits

Properties win with:

• Increased motivation for responsible renters to make on-time payments consistently
• Competitive value-added option for applicants and renewing residents
• ”Hands-free” solutions available for any portfolio/asset type, from student housing and conventional market-rate rentals to affordable housing and senior living properties

Why rent reporting resonates with residents

Property management groups offering online rent payments with the added capability to report rent payments are gaining an edge with renters who want to build their credit to improve their lifestyle and meet personal financial goals.

While 79% of renters recognize that a higher credit rating gives them greater buying power, over half of them don’t realize that reporting timely rent payments can help them establish a positive credit history and improve their credit scores.

So, learning what to look for in their property’s process for reporting rent payments can offer a simple, steady path to improving financial opportunities for responsible renters:

Convenience — After completing a fast, easy sign-up for rent reporting services in the leasing process or the resident portal, a rent reporting subscription synchronizes with your online rent payments to simplify updates to payment history with credit reporting agencies.

Affordable options — For a few dollars extra each month, a subscription to rent reporting can also automatically send rent payment activity to the three major credit bureaus to help build a positive credit profile.

Individual impact — Each individual on the lease can subscribe to report their own rent payments for as long as they lease on the property that offers the service — with optional automatic extensions upon renewal.

Secure, accurate reporting — When rent reporting is integrated with the property’s online payment services, automated processing minimizes mistakes and unauthorized handling of payment details with faster results.

How good credit is good for your community

Despite relatively low adoption among rental communities (only 17% in multifamily in 2019), property managers increasingly view relationships with their renters as more than transactional. As apartment operators grapple with a greater influx of supply, adding to the competition for reliable renters, they recognize that adding value to the resident experience is critical for attracting new lessees, maintaining consistent revenue and improving resident retention. 

When credit reporting agency Transunion explored the issue of rent reporting in 2023, they found more than 58% of renters would be more likely to rent from someone who reports rent payments, and 82% said they would be more likely to make on-time rent payments if payments are reported.

Competing for younger and more cost-burdened renters makes it more important than ever to provide a path to being rewarded for paying rent on time, especially for renters still building or rebuilding their credit histories. The operational boost for property management extends beyond filling units, showing that these responsible renters benefit the bottom line and the long-term value of the community:

• More likely to make timely rent payments, maintain the property and leave positive reviews that attract new tenants
• More likely to stay longer at the property, reducing vacancies and costs associated with finding new tenants

Using rent payment software to integrate payment reporting with online rent collection can benefit property operations at every level to make the payment process simpler and more convenient for renters and property staff:

Seamless automation — Once renters subscribe to rent reporting during leasing or in the payment portal, there is no administration or process change for residents or property staff.

Consistent revenue — The convenience of online rent collection that supports rent reporting can significantly improve on-time payment rates and maintain a stable income flow.

Responsible renters — Attracting better-quality residents who value and actively build or maintain their credit scores leads to more consistent rental revenue and better care for the property.

Deterring defaults — In contrast, rent payment reporting may deter tenants with a history of late or missed payments, protect revenue that builds value and support the property’s positive reputation in the market.

Efficient reporting — Adopting rent payment software can streamline reporting because all transactions are recorded promptly and accurately, saving time and reducing errors for more reliable reporting.

Compliance — Making secure rent reporting automatically available for rent payments aligns with growing legislation and standards to support equity in access to financial advancement opportunities for renters across the economic spectrum

Support credit-building services for a better renter experience

A property that prioritizes the issues and services of rent reporting can gain a leg up on the competition in a crowded apartment market. Supporting residents in improving financial well-being and peace of mind can put you at or near the top of the list with prospective renters.

Simply stated, leasing with a community that cares about their credit-related goals is an easier, faster and more confident decision for renters. Offering hassle-free payment options that help them build positive credit directly supports them in improving approval odds for their next big purchase. 

Apartment operators who add rent reporting to their online payments communication process can fill a competitive and operational gap in modern apartment leasing that creates a better resident experience for more responsible residents who will make your community home for a longer time — and add value to your property for as long as they stay.

Check out the 2023 National Renter Study to learn more about how renters feel about financial flexibility, how generations prioritize rental factors and how technology drives rental decisions across the U.S. multifamily market.  

Explore the advantages of automating timely rent reporting and collection with the RealPage Online Payments platform that integrates positive credit bureau reporting to benefit apartment communities and residents.