Tenant curiosity in lease reporting has grown because the Federal Housing Finance Agency reaffirmed plans to incorporate these funds in mortgage credit score choices.
Instances of self-reported lease are up up to now in 2025, at 13% in comparison with 11% in 2024, based on credit score bureau TransUnion. That may assist enhance the usage of a credit score score that includes lease, VantageScore, as two quasi-public mortgage patrons the company oversees undertake it.
VantageScore’s wider adoption could hinge on whether or not good points in tenant reporting can outweigh declines amongst landlords and Gen Z.
“We hope the brand new FHFA coverage will assist enhance the variety of shoppers choosing lease cost reporting,” stated Maitri Johnson, senior vp and head of TransUnion’s tenant and employment screening enterprise, in a press launch.
Segments the place lease reporting is declining
While all different age teams reported good points, Gen Z’s participation price scaled again a bit this 12 months from 26% to 18%. But the youngest cohort nonetheless outpaces millennials’ 16% participation price, Gen X’s 12% and the Baby Boomers’ 8%. The common participation price for all age teams mixed was 13%.
“The decreased participation from Gen Z was shocking contemplating they seemingly don’t have sufficient credit score constructed but,” stated Johnson. “With lease funds now being thought of as a qualifier for mortgages, many Gen Z shoppers could also be higher positioned to realize homeownership at an earlier age than they in any other case would.”
Rent reporting improved 80% of Gen Z’s credit score scores, in comparison with 88% for millennials, Gen X’s 75% and Boomers’ 70%, giving all generations incentives to report. The common for all mixed was 79%.
Landlords, who’ve been reporting lease at the next price than tenants, decreased their reporting share to 48% to 44% for the primary time within the 4 12 months report’s historical past.
“The sudden lower in property managers’ participation and the slight rise in shoppers who say their funds are reported suggests that customers could also be self-reporting their lease funds by means of third-party knowledge furnishers,” based on TransUnion.
Property house owners in any other case have incentives for prime participation charges as a result of 57% of tenants have proven a choice for landlords who report, and nearly 80% of renters have an elevated probability of creating well timed funds once they’re being tracked.
State assist for lease reporting
Fannie Mae and Freddie Mac’s oversight company hasn’t been the one government-related entity to assist lease reporting, TransUnion famous.
The Department of Housing and Urban Development issued a FAQ on the subject early this 12 months to supply steerage.
A brand new California regulation requires landlords to supply constructive lease reporting to TransUnion and different main credit score bureaus, which collectively again a brand new score Fannie and Freddie are including.
Also a now-concluded lease reporting pilot in Colorado has given rise to a state housing finance company partnership with an organization known as Esusu that helps lease reporting in HFA properties. Esusu additionally has supported lease reporting at Freddie and Fannie Mae.
In addition, New York City launched a lease reporting pilot earlier this 12 months.
“The regulatory developments we have seen on this area are very encouraging,” Johnson stated.
