Innovative new feature helps renters build a credit history
at no cost to them or their landlord
SEATTLE, Jan. 17,
2024 /PRNewswire/ -- Zillow is introducing a new
feature that allows renters who pay their rent on Zillow to have
their on-time payments reported to a major national credit bureau
at no cost to them. This is a first for any online rental
marketplace, offering a unique opportunity for renters to build
credit through regular rent payments at no additional cost.
Zillow's rent reporting program is rooted in the recognition of
a significant gap in credit reporting. Despite renters in the U.S.
spending hundreds of billions of dollars annually on rent, these
substantial payments often aren't reported. Concurrently, Consumer
Financial Protection Bureau data indicates that approximately 26
million Americans are "credit invisible," meaning they lack a
history with major credit bureaus.
Recent research by Zillow highlights the importance of this
issue, particularly in Black communities, where residents often pay
more in rent than they would toward a mortgage. This is due, at
least in part, to limited credit access — a remnant of historic
redlining. For example, in New
Orleans, the median renter in a credit-insecure area spends
77.5% of their income on rent, compared to 28.6% for a typical
mortgage.
Reporting on-time rent payments can help renters build or
enhance their credit history, an important step in accessing
broader financial opportunities. Higher credit scores can
potentially lead to easier loan approvals as well as better rates
for home purchases, credit cards, future rentals and more, with the
impact varying based on the credit scoring model that lenders
use.
"Every on-time rent payment is a testament to a renter's
reliability, yet it's often overlooked in credit reports, and we
want to change that," said Michael
Sherman, vice president of Zillow Rentals. "This new program
is all about acknowledging and supporting consistent financial
habits. It ensures renters' largest expense can now work in their
favor and potentially help them on their path to finding and
securing a place they can call home."
All renters who use Zillow to pay their rent can opt in to this
feature for free. Once a renter decides to opt in, Zillow will
report on-time rent payments to Experian, a major credit
bureau.
How rent reporting on Zillow works
Zillow's rent reporting feature is designed for ease and
efficiency, providing renters with a straightforward, secure path
to building credit. Here's an overview of the process:
- Opt In: Renters already utilizing Zillow for rent
payments can enable rent reporting via their Renter Payments
Dashboard on Zillow. New renters will be asked if they'd like to
opt in when they enroll in the service.
- Payment Tracking: Once a renter opts in to this service,
Zillow identifies on-time rent payments, defined as payments made
within 30 days of their due date.
- Credit Reporting: These on-time payments are then
reported to Experian on a monthly basis. Late payments, defined as
those more than 30 days past due, are not reported by Zillow.
After the user's enrollment, the process is automatic. Zillow
continues to report the renter's on-time monthly rent payments
without requiring further action from the renter. Renters may opt
out of rent reporting at any time. Zillow is committed to
broadening this service while consistently offering valuable
solutions that benefit renters.
This launch is part of Zillow's commitment to creating tools to
empower individuals in their housing journey. It complements
Zillow's comprehensive marketplace for buying, selling and renting
properties, showcasing our dedication to streamlining the process
to get more people home.
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and
ZG) is reimagining real estate to make home a reality for more and
more people. As the most visited real estate website in
the United States, Zillow and its
affiliates help people find and get the home they want by
connecting them with digital solutions, great partners, and easier
buying, selling, financing and renting experiences.
Zillow Group's affiliates, subsidiaries and brands include
Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out
East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up
Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
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