Gen Z Helps Drive More Than One in Four Property Managers to Report Rent Payments
New TransUnion research observes a rise in tenants seeking and having rent payments reported
An increasing number of renters are benefitting from having their rent payments reported to credit reporting agencies, and the number is likely to grow as the youngest generation — Gen Z — is most interested in this practice. New TransUnion (NYSE: TRU) tenant and employment screening research found that more than one in four property managers (27%) who are aware of the practice now report rent payments to credit reporting agencies, with nearly one-third doing so since January 2020.
“With a strong push from Gen Z renters, who make up a significant portion of the renter base today, we’ll likely see reporting become an industry standard—and as a result, a critical mass of renters who can elevate their standards of living through greater access to credit.”
This is a significant increase since TransUnion last conducted similar research in early 2019 and found only 17% of property managers were reporting rent payments at that time. The research included two surveys conducted in February and March 2022, with responses from more than 350 multifamily executives and 2,039 adults who rent the home or apartment in which they currently live. The complete findings are detailed in TransUnion’s Quick Guide, “How Gen Z is Making Rent Payment Reporting an Industry Standard.”
“We’ve seen some progress in property managers adopting rent reporting in the last couple years; however, there is clearly still room for the number of reporting companies to grow,” said Maitri Johnson, vice president of tenant and employment screening at TransUnion. “With a strong push from Gen Z renters, who make up a significant portion of the renter base today, we’ll likely see reporting become an industry standard—and as a result, a critical mass of renters who can elevate their standards of living through greater access to credit.”
The survey also sought to understand property managers’ rationale for deciding whether to report rent payments to credit reporting agencies as well as their perceptions of the process.
Top 3 Reasons for Reporting
Top 3 Reasons for Not Reporting
|1. Help residents build credit (80%)||1. Process is too time consuming (22%)|
|2. Encourage residents to pay on time (71%)||2. Don’t know how to do it (21%)|
|3. Attract residents who are financially responsible (49%)||3. Too much work/Don’t see the benefit (20%)|
While 72% of property managers who actually report rent payments say that the process is somewhat easy or very easy, only 28% of property managers who do not report rent payments expect that to be the case.
When asked to identify which benefits would convince them to begin reporting rent payments, 70% of property managers said they were at least somewhat likely to report if it meant attracting renters who pay on time. Additionally, 69% were at least somewhat likely to report if it lowered risks of evictions and skips.
On the other side, when renters were asked how having their rent payments reported to credit reporting agencies would influence their behavior, 77% said they would be more likely to pay on time.
In line with these findings, third-party data providers and industry associations are becoming more vocal in their support of rent reporting.
“We chose to start reporting monthly rent payments to TransUnion because we felt like the people that we service need an opportunity to be able to build their credit and their financial futures,” said Jim Rowley, Head of RentPlus at Rent Dynamics. “TransUnion has been an excellent partner in this endeavor, with cutting edge data and analytics solutions and peerless multifamily industry knowledge.”
“Consumers should literally get credit for paying rent,” said Eric J. Ellman, Senior Vice President, Public Policy and Legal Affairs, Consumer Data Industry Association. He added, “The more information the credit reporting system includes to prove their creditworthiness, the more consumers it can help access fair and affordable credit.”
Noting this trend, Johnson added, “There is tremendous opportunity in this space particularly as the national conversation focuses on financial inclusion, a key strategic initiative of TransUnion. We need to expand access to financial goods and services to more consumers, particularly those who have little to no credit profiles. Reporting rent payments is a win-win for these consumers and property managers, as it attracts responsible renters and rewards them for on-time payments.”
Generation Z ahead of the curve
In its survey of renters, TransUnion found more than half are aware that rent payments can be reported and are at least somewhat interested in having their rent payments reported. Those sentiments are more pronounced among Gen Z as 60% are aware of and interested in having their rent payments reported.
That interest is also being put into action as 27% of Gen Z renters say they have their rent payments reported. This is significant, considering only 15% all renters have their payments reported. A related finding: 59% of those who have been renting five years or less say they are interested in having their rents payments reported, compared to 47% of those who have been renting more than five years.
“Increasingly, younger renters are seeking out property managers who offer this service elevating competitive differentiation for property managers,” said Johnson. “It’s clear that Gen Z understands the value, and as they gain market influence, will likely push more property managers to provide reporting.”
The research also indicates that rent reporting has a positive impact, as more than 70% of those who have their rent payments reported to credit reporting agencies are seeing improvements to their credit scores. As a result, they are planning to leverage their higher scores for material lifestyle improvements: 41% will apply for a personal loan; 38% will apply for a mortgage; and 28% will apply for an auto loan.
“Ultimately, rent payment reporting is helping more people gain access to credit that can positively change their lives,” said Johnson. “Greater financial inclusion is good for the industry and good for consumers, and I’m excited to see it gain traction.”
For more information about the research, read the Quick Guide, “How Gen Z is Making Rent Payment Reporting an Industry Standard.”
Property managers: Get started helping your tenants build credit through reporting rent payments.
Are you a tenant interested in improving your credit score? Read TransUnion’s blog to find out more about how rent payment reporting can help. Tenants can also read TransUnion’s guide “How to Read Your Credit Report.”
About the Surveys
The online renter survey took place in February 2022 and included responses from 2,039 renters ages 18 and above who are who are renting the home or apartment in which they currently live. The property manager survey took place in late February and early March 2022 and included responses from 353 multifamily executives.
About TransUnion (NYSE:TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.® A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.