
A recent study commissioned by the US Department of Housing and Urban Development (HUD) introduces the issue succinctly:
“HUD subsidizes the rent of nearly one million very low-income households who live in public housing. Many of the households living in public housing have thin or invisible credit files or low credit scores, despite the fact that they generally pay 30 percent of their income towards rent each month. For many assisted households, rent payment constitutes the largest single expenditure on a monthly basis. In light of this information, this study examines the following question: what if public housing agencies provided the “full file” rental payment history of all tenants to credit reporting agencies, including histories of on-time, late, and omitted payments?”
There are some clear potential benefits of such reporting. Without a payment history, many public housing residents have no credit rating at all. And yet many free market landlords consider a rental applicant’s credit rating when deciding or declining to rent.
The opportunity to create or improve a credit rating could give a tenant an otherwise unattainable goal of moving out of of public housing, even obtaining a mortgage.
So. Did the study find some benefit to credit reporting in reporting individual payment performance? In word, yes.
Learn more in the highly readable forward and executive summary of the report itself: Potential Impacts of Credit Reporting Public Housing Rental Payment Data
All we need to see now is HUD using its clout to make it happen!