A New Age of Transparency

By Stephen L. Burger, CPM, CRX, CRM

The apartment rental market is transforming, with a technology-driven approach to transparency, one that I believe rivals that of the commercial real estate market. Experian, Equifax and TransUnion, the main players on the credit-reporting stage, have all unveiled programs tracking the total payment history of renters and homeowner association members--positive information as well as negative.

This is a huge development, and one that I believe elevates the entire industry. Ten years ago, determining the creditworthiness of a tenant was a process mired in mystery. A management company could access the eviction records of potential tenants, but that by no means presented a complete or fair picture. Today, thanks to such services as mentioned above, a more accurate profile exists, one that clearly benefits not only building ownership and management, but also the tenants themselves.

This is especially true for diligent residents, who clearly gain most from a complete credit picture and can now get proper credit--literally and figuratively--for that diligence. In fact, as the Washington Post reported, “When their monthly payments were reported to the bureau by landlords, nearly 20 percent of renters saw an increase in their score of 10 points or more after just one month.”

https://www.washingtonpost.com/realestate/tenants-can-now-have-their-history-of-rent-payments-incorporated-into-their-credit-scores/2014/06/26/6c8b8c78-faf0-11e3-932c-0a55b81f48ce_story.html

EBMC contributes to the Experian RentBureau (For more information, click http://www.ebmc.com/uploads/Experian%20RentBureau%20Brochure%202014.pdf), the largest and most widely used database of rental payment information, which currently boasts data on more than 12 million residents nationwide. There, we can access rental payment histories going back as far as 25 months, including such key information as date opened, monthly payment amounts and recent payments.

As explained on our RentBureau page, “The addition of positive rental payment data in Experian credit reports can be a tremendous benefit to anyone who rents, especially non-credit, cash-based consumers. We recognize the value of having a positive rental payment history, and we want to provide our residents with this unique opportunity to get credit for their on-time rental payments.” Equally important, the information is timely, updated every 24 hours.

As Mike Gardner, senior vice president and sales leader at Equifax, said in a statement earlier this month, “Equifax is committed to providing consumers with additional means for building their credit histories. Introducing new sources of data beyond what has traditionally been found on credit files can provide additional insight into a consumer’s financial behavior and help deliver expanded credit access.”

But there is an equal and positive reaction to this new trend, one that benefits the building manager. As I stated in last week’s blog, http://www.ebmc.com/Management-Trends---The-Property-Management-Value-Proposition, property managers are the key drivers of real estate value and a major contributor to the bottom line of the owner/investor. A major part of this mission is the screening and retaining creditworthy tenants, and this growing trend takes much of the guesswork out of that critical piece of the financial puzzle.

With the growing acceptance and the clear need for programs such as these, the apartment industry continues to grow in its sophistication and transparency and therefore in its professionalism.

Email me and let me know what your experience with credit-reporting services has been. As always, we look forward to hearing from you.

Sincerely,
Steve Burger, President
SteveBurger@ebmc.com
EUGENE BURGER MANAGEMENT CORPORATION

As president and COO of Eugene Burger Management Co., Steve Burger is directly responsible for the overall quality, depth and consistency of management services provided in all 15 regions in the EBMC coverage map.

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