City Comptroller Scott Stringer has announced a new pilot program that will allow New Yorkers who make rent payments on time to see a boost in their credit scores.
Last October, Stringer released a report named “Giving Credit to Renters: How Reporting Rent Payments Can Lift NYC Credit Scores,” that outlined the disparities in credit scores across the five boroughs. He found that the lack of factoring in rent towards credit scores primarily affects low-income New Yorkers and people of color. Since not paying your rent on time can negatively impact your credit score, why not give good renters the opportunity to boost their credit over time as they make punctual payments?
In partnership with the Banana Kelly Community Improvement Association, Stringer has announced a “Making Rent Count” initiative, that will give participants the option to add rent payments to their rent histories in the same way that homeowners do with mortgage payments. More than 600 tenants from 27 buildings in the South Bronx will be eligible to join the pilot. Banana Kelly will report rent information directly to credit bureaus for those who choose to participate.
“We’re facing an affordability crisis, and we all know how soaring prices and sky-high rents make life difficult for New Yorkers across the five-boroughs. One of the hidden roadblocks to financial success is credit – and access to it,” said Stringer. “This innovative new program empowers tenants, helps level the playing field, and reflects another step to unstack the economic deck. It’s breaking new ground – and it will help make our city fairer.”
According to Stringer’s research, the opt-in program would give first-time credit scores to about 30 percent of renters and would either raise or add depth to credit files for 94 percent of projected participants who currently have a credit score. More than half of participants would see their score rise between one and ten points; 19 percent of folks would see their score raise by more than 11 points; 18 percent would see no change at all; and 6 percent would see a decline in their scores.
The buildings in the pilot program will fall within three zip codes that rank among the bottom ten percent of zip codes across the city by median credit score. In these neighborhoods, more than 40 percent of residents have never had a credit score, are re-establishing their credit, or are new to credit altogether.
“To tenants, our message is simple. If you pay your rent on time every month, this pilot could ultimately be a game-changer,” said Stringer in his announcement. “At a time when we need to use every tool in the kit to make our city more affordable, this new pilot could be the start of something important.”