At Globe Live Media we tell you about the most recent Fannie Mae program, which allows you to build your credit score by paying your rent in a timely manner if you are a tenant in the US.
There are many ways to build your credit history in the US without using your credit card, and now, thanks to the National Federation of Mortgage Associations (Fannie Mae, for its acronym in English), renters can build their credit score paying your rental income through the Multifamily Positive Rent Payment Reporting program.
This program consists of allowing certain homeowner families to report rent payment data on time to the three most important consumer reporting offices in the United States: Experian, Equifax and TransUnion. In this way, tenants can benefit from making their rent payments in a timely manner.
It should be noted that this program is still in the pilot phase (it began on September 27, 2022), and that the companies approved to collect data related to rent payments are Esusu Financial, Inc., Jetty Credit and Rent Dynamics.
The objective of this program is to help a large part of the population in the United States that lacks a credit history for various reasons, among which is financial discrimination.
“Close to 20% of the population in the United States has little or no credit history, and this group is disproportionately made up of African-Americans and Latinos. Of consumers who have credit scores, a disproportionately large group of African Americans have low credit scores. These imbalances reinforce racial disparities in access to credit and qualifying for affordable housing between renters and homeowners,” said Michele Evans, Executive Vice President and Head of Multi-Family at Fannie Mae.
The launch of this program, Evans believes, marks another step in Fannie Mae’s journey to make the real estate system work better for everyone, as well as to advance real estate fairness in the United States.
Although this program is intended to support communities with more systemic barriers to accessing better credit opportunities, it should be noted that those who sign up for it and do not make a rent payment on time will be automatically disenrolled to keep their credit score intact and that not be negatively affected. This is the reason why this is a program whose name has the word positive: its only function is to help, not penalize.
The measure comes at a time when renters can benefit, since rents in the United States recently fell, according to an analysis by CoStar Group Inc. Although there was a small drop, the truth is that it is a small respite for renters , who could earn benefits by meeting their rental payments on time.