Reporting Rent to Credit Bureaus Is Better for Tenants and Landlords

For landlords who manage large property portfolios, the many degrees of separation between the landlord and a tenant for a multifamily unit can make it all too easy to be removed from the realities of renting. In theory, renting is an alternative to owning a home for those without the capital or credit to buy a property of their own. For the renters, though, having a long history of on-time rent payments does very little to impact their financial standing, because, unlike a mortgage payment, rent payments are generally omitted from credit score ratings. Obviously, that exposes a problem for renters, but it should be a concern for landlords as well. 

Mortgage lenders using an applicant’s credit score to determine their ability to get a mortgage has only been standard practice since 1995. It’s funny to think that the link is so young when using a numerical score to represent an individuals’ creditworthiness is a concept dating back to the 1840s. Lewis Tappan, a silk-trading abolitionist who was burned one too many times by defaulting customers, came up with the first iteration of a national system for credit-checking. Josh Lauer, author of Credit Reporting and the Invention of Financial Identity in Nineteenth-Century America wrote that Tappan’s crude credit reporting system “introduced an entirely new way of identifying, classifying, and valuing individuals as economic subjects.” Tappan’s invention effectively “became a key infrastructural component of the modern credit economy and, in turn, produced its own category of social reality.”

That “social reality” that Lauer

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