Fannie Mae’s plan strengthens tenants’ credit scores

Exclusive: Fannie Mae’s plan strengthens renters’ credit scores

  • Only positive payments from tenants will be reported (those that come after will be unsubscribed) and tenants can opt out at any time.
  • One in ten U.S. adults, or about 26 million people, are “credit invisible,” meaning they do not have a credit history with one of the three nationwide credit reporting agencies.
  • Renters are seven times more likely than homeowners to have poor credit scores, according to an Urban Institute study

When it comes to credit scores, renters are at a distinct disadvantage compared to homeowners.

While mortgage payments are reported by lenders to credit bureaus, landlords typically don’t report rent payments — and that can hamper a tenant’s ability to build a credit history.

Fannie Mae plans to subsidize the costs for landlords of multifamily properties it finances to help renters build credit starting Tuesday, the mortgage giant shared exclusively with USA TODAY.

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