Senate Bill 1157 – Helping to Solve the Issue of Credit Inequity
Contributed by The Verification Company
(Editor’s Note: In the June issue of “Apartment Age Magazine,” we published an article titled “California Passes Legislation to Help Renters Establish Credit for Paying Rent” which explained the requirements imposed under Senate Bill 1157. This article provides a solution for reporting rental payments to major credit bureaus.)
There are currently about 43 million rental housing units in the U.S. today, and it is estimated that less than 1% of rental payments being made are reported on renters’ credit reports. Renters in historically marginalized, impoverished, and distressed communities that often can be disproportionately of color, immigrant or Native American are unable to build solid credit histories and credit scores when their largest monthly payment, the rent, is never reported to the credit bureaus. This is contributing to a growing, new national crisis termed as “Credit Inequity.”
Credit Inequity often and easily limits realization of the American Dream of home ownership by placing it out of reach for responsible renters seeking to secure their economic futures through homeownership and provide their families with housing security. The Credit Inequity issue is behind what is driving new legislation such as California’s Senate Bill 1157 that requires housing providers to offer credit reporting as an option at certain rental properties. This new California law, which went into effect July 1, 2021, requires reporting to at least one of the credit bureaus. Senate Bill 1157 recognizes that in most renter households’ rental payments are the largest monthly payment. Paying that rent on time shows as much fiscal responsibility as an individual who consistently pays a mortgage on time. This new law is a first step in California for making credit equity attainable for thousands of Californians.
So, how can property owners and managers responsibly address this new legislation and help to correct to a civil rights and economic issue that has kept the American Dream of home ownership out of reach for so many? The answer is The Verification Company. The Verification Company provides rental housing providers with payment accountability and credit bureau reporting for the State’s renters. But most importantly, renters will receive almost an immediate increase in their credit scores by reporting rental payments, which is their largest monthly expenditure. Your renters’ attention to fiscal responsibility can be rewarded.
The Verification Company’s credit bureau reporting system has been developed by a property management company owner who previously also was a mortgage banking professional who saw a need to create a credit reporting system to assist first-time homeowners that he saw struggling to qualify for mortgages although they had always been reliable renters that paid their rent on time. After researching credit bureaus’ expectations and working to create an efficient platform for gathering and reporting rental payment data, The Verification Company has been reporting rental payment data since 2019. The company has spent the last two years perfecting a system to efficiently collect, secure, and report rental payment data to each of the major credit bureaus.
The Verification Company also provides property owners and managers an innovative solution to rent collection challenges because any renters who are trying to establish an excellent credit history will always pay their rent on time when they know payments are being reported to the credit bureaus and that an on-time payment history will help them attain improved credit scores and eventual property ownership. In other words, the solution to the age-old rent collection problem lies in handing the task of data collection and reporting to the credit bureaus with the assistance of The Verification Company.
The services provided by The Verification Company rewards those renters who pay on time. For timely payments, renters will be rewarded when property management companies use The Verification Company to report data to the major credit bureaus, Trans Union, and Equifax. Property management companies should enlist the services of The Verification Company within appropriate addendums to rental and lease agreements by indicating that a nominal fee will be charged per California law. Credit bureau reporting through The Verification Company will allow any responsible renters to reap the benefits of their fiduciary responsibility and increase their credit scores resulting from the on-time payment of their rent. Soon, renters can obtain the “bridge” they need and be well on the way to establishing credit equity for all renters.
The knowledge that monthly rental payments are recorded, collected, and reported by The Verification Company to the credit bureaus will encourage your renters to prioritize paying their rent on time. Be sure to check out the discounts that may be available to property owners and managers that enroll a high volume of renters.
The Verification Company can give you and your renters a “win-win” solution that solves the age-old problem of a property owner’s desire to be paid timely rents and a renter’s desire to receive the benefits of paying rent on-time. Through The Verification Company, you can help your renters build the bridge between a lackluster credit scores and solid, reliable credit reporting that allows for improved credit scores and perhaps, ultimately mortgages. Help solve the problem of economic injustice and Credit Inequity and contact The Verification Company today. You can help even the playing field by ensuring there’s credit equity for all – especially for those who historically have been left out altogether.
The Verification Company (TVC) is a contracted data furnisher that reports accurate rental payment data to two of the major credit bureaus, TransUnion, and Equifax. Its system was developed to assist property owners and managers, to encourage accountability for on-time rental payments while benefiting tenants with the potential of significantly increasing their credit scores. For more information, contact The Verification Company at www.rentalverification.com or call them at (866) 612-1601.