The landlord can make the credit rating better?
January 18, 2010 9:47 AM   Subscribe

I have a friend who just started renting in the area (Detroit, Michigan suburbs). He says his landlord claims that he will increase his credit rating if the rent is paid on time. Is this BS? Or can the landlord have a positive effect on the credit rating? [Obvious: YANAL, YANML, You Are Not Anyone's Lawyer]
posted by Drasher to Law & Government (5 answers total)
 
That sounds a bit fishy. The landlord can certainly have a negative effect on his score by reporting him to one of the bureaus if he doesn't pay rent. But, unless he's actually entering into a loan agreement then there's really no mechanism for the bureaus to report one way or the other on timely payments. (I am not a credit industry insider.)
posted by Burhanistan at 9:55 AM on January 18, 2010


Subscribers to a credit reporting agency generally report both on-time and late payments made. If you pay your rent late every month, and the landlord submits that info to a credit agency, it's going to show up on the report, and would detract from your score. Similarly, a long history of on-time payments does indeed have a positive effect on creditors willingness to loan.

But, unless he's actually entering into a loan agreement then there's really no mechanism for the bureaus to report one way or the other on timely payments.

Sure there is, he pays them to subscribe, they classify him as a landlord, and when he submits a report, it gets added to the whole of your credit report as such. They repeat whatever he reports to them unless you contest it.
posted by nomisxid at 10:42 AM on January 18, 2010 [1 favorite]




It seems possible, like normisxid said, if he paid to subscribe, but I've never heard of this and I don't know why he'd bother. Or, now that I think of it, why he'd lie about it because it's cheaper to pay on time in the first place in addition to avoiding antagonizing your landlord and courting eviction. FWIW IAALL

Weird.
posted by cmoj at 10:51 AM on January 18, 2010


In my experience, it is very rare for anyone — landlords, utility companies, credit card companies, whatever — to report on-time payments. Most often, they only bother reporting when you're late and they need to tighten the screws.

But it is certainly possible to report on-time payments. Your friend's landlord might be offering to do that — because he's a nice guy, or more likely because he's found it to be in his best interest one way or another. Either way, your friend should take him up on it, because it's a generous move that goes above and beyond what he's required to do.

...and I don't know why he'd bother.

Well, off the top of my head, this will buy him a whole lot of loyalty from anyone who cares about improving their credit score. I wonder if he's had trouble finding or keeping tenants who are responsible and financially stable. (This seems to be something that most small-time landlords have trouble with, FWIW.)
posted by nebulawindphone at 1:15 PM on January 18, 2010


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