Rental Tradeline Reporting Change
Through our software Appfolio, we are currently reporting residents’ positive rental payment history to the Experian consumer credit file, however there is an upcoming change regarding how rental tradelines will display on Experian credit reports.
As of June 30, 2014, all active and newly reported leases will display as an “Open” portfolio type, defined as an account with one scheduled payment due that must be paid in full each month. In the past, rental payment tradelines typically displayed as an “Installment” portfolio type. In this type, the recent balance was determined by calculating the sum of up to 12 remaining lease payments, e.g., 12 months x $1,000. In certain cases, lenders misunderstood this value. Going forward, for the recent balance field, active and newly reported leases will now simply display the monthly rent amount on the lease, e.g., $1,000.
What’s not changing?
All leases closed prior to late June 2014 will remain as originally reported. These historical leases will display as a paid or closed account with a zero balance.
Click on the links here to view an updated resident brochure and sample tradeline that reflect the change in reporting. Please feel free to distribute these documents to your residents and let me know if we can help with any additional materials.
We hope that this change will be well received by you and your residents. We have heard your feedback and feel the change in reporting now represents a renter’s obligation on a lease more accurately. Don’t hesitate to reach out to me or anyone on the Experian RentBureau® team with questions.