Los Angeles-based rental management software provider RentSpree has launched a reporting feature called Credit Builder, which will facilitate reporting online rent payments to the credit bureaus.
In June 2022, Freddie Mac authorized on-time rental payments to be included in its underwriting system. In doing so, the government-sponsored enterprise hoped to widen access to homeownership for people with no to little credit history.
Fannie Mae pioneered that trend by allowing on-time rental payments to factor into its underwriting calculations as early as August 2021.
“Building a credit history through rent payments can significantly impact loan approvals, especially for those with limited credit history,” Michael Lucarelli, CEO and co-founder of RentSpree said in a statement. “RentSpree aims to facilitate this process and empower renters to achieve their financial goals, whether it’s securing a loan, purchasing a vehicle, or buying their dream home.”
Since consumers for the most part are still unable to report directly their on-time rent payments, RentSpree’s Credit Builder provides a valuable service, the statement said.
“Research shows that when payments are reported to credit bureaus, seven out of 10 renters are more likely to pay on time,” Lucarelli added. “So this feature is going to benefit those who are already punctual while encouraging others to develop greater consistency. It’s a win-win.”
In October 2022, JPMorgan Chase launched a platform that automates the invoicing and receipt of online rent payments, serving property owners, managers and tenants.
RentSpree was ranked #992 on Inc. 5000’s fastest-growing private companies in 2023.
