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CBS News
11 hours ago
- Business
- CBS News
Some New Yorkers who pay rent on time can increase their credit scores through a new pilot program
Some New Yorkers now have the opportunity to improve their credit scores just by paying their rent on time. The pilot program through Mayor Eric Adams' "City of Yes for Families" initiative is geared towards tenants who live in affordable housing and will reach about 500 households. Their rent payments will be reported to major credit bureaus through a free platform. This is all part of the city's "Where We Live" fair housing plan to help more New Yorkers become homeowners. The pilot program is expected to run for the next 15 months. Tenants can decide if they want to opt in. Pros and cons of rent reporting pilot "If this is reported to the credit bureaus, the three bureaus are keeping track, in a few months, you should see your credit score rise right away, so this is something that would take immediate effect," said economist Timothy Malefyt, with the Fordham Gabelli School of Business. Malefyt says transparent data practices are critical, however, and tenants should be fully informed about the risks and benefits. "What if a tenant missed payment and there's a late payment? This could adversely affect their credit score," he said. New Yorkers who spoke to CBS News New York saw pros and cons to the idea. "People living in apartments and does not get no reward for paying their rent on time," Harlem resident Ron R. said. "That sounds good for the people," Harlem resident DyQuan Norman said. "It's the political time of year so they gonna talk, talk, talk, but then it's totally different when it happens," Harlem resident Alisa Figueroa said.
New York Times
20-06-2025
- Business
- New York Times
A Way for People With Low Credit Scores to Raise Them
People who pay their rent on time can establish credit scores or significantly raise low scores if the payments are reported to credit bureaus, new research found. A study published this month by the Urban Institute, a think tank in Washington, D.C., looked at two groups of tenants recruited in 2021 and 2022. The members of one group began having their rent payments reported to credit bureaus immediately after signing up to participate in a program offered by their properties. The members of the other group had their rent reporting delayed by four months. The study found that rent reporting leads to 'large, statistically significant increases' in the likelihood of having a score and of having at least a 'near prime' score — a minimum of 601 on a scale of 300 to 850. The research was the first rigorous, randomized study of 'positive' rent reporting, said Brett Theodos, a senior fellow at the institute and an author of the study, which enrolled 269 participants in affordable housing programs in five states and Washington. In positive rent reporting, only payments made on time are supplied to credit bureaus. The study used VantageScore, a competitor to the widely used FICO score. VantageScore, which uses a scale similar to FICO's but assigns different weights to certain factors, was founded by the three big credit bureaus: TransUnion, Equifax and Experian. Still, some consumer advocates remain wary of rent reporting, saying it may pose risks to vulnerable renters. Want all of The Times? Subscribe.
