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Inman has learned that rental industry proptech RentSpree has rolled out a new feature that will assist tenants in building their credit. The effort overlaps with the company’s ongoing effort to elevate renters in the mindshare of residential real estate agents.
Simply named “Credit Builder,” the feature will allow credit reporting institution TransUnion to consider rental payments when its algorithms build credit scores, an Oct. 3 press release stated.
“No pun intended, but let’s give credit where credit is due,” said Michael Lucarelli, CEO and co-founder of RentSpree, in the release. “Building a credit history through rent payments can significantly impact loan approvals, especially for those with limited credit history. RentSpree aims to facilitate this process and empower renters to achieve their financial goals, whether it’s securing a loan, purchasing a vehicle or buying their dream home.”
The idea to empower renters with additional financial security is rooted in the concept of open finance, a fintech-derived movement that embraces consumer control of financial data, secure one-on-one business transactions and the deconstruction of archaic economic principles that favor large enterprises.
A number of new mobile technologies, such as personal banking and payment apps, increased federal scrutiny on legacy banks and the general consumer demand for more efficient transactions is also pushing open finance principles into the mainstream.
Historically, on-time rent payments have not been part of a person’s credit history, despite averaging close to 40 percent of a person’s outgoing expenses, according to RentSpree. Fannie Mae and Freddie Mac recently began to consider rent as a viable financial consideration for mortgage applications.
RentSpree provides software for leasing agents and property managers to better manage commercial multi-family communities but also a broad suite of solutions for residential agents to market to and service renters. In that effort, the company has partnered with a large number of multiple listing services around the country.
Credit Builder is its latest update, and is accessible to renters via RentSpree’s digital payment tool. The company released RentSpree Pro in Apr. 2023 to offer agents a series of digital marketing tools to help them reach the rental market.
RentSpree isn’t the first to assist renters in this capacity and is actually somewhat behind in the effort. A number of apps have been offering credit reporting for some time, such as Gravy and Boom, the latter of which reports to all three credit agencies.
However, RentSpree has been a champion of helping agents assist renters since its inception, pushing the industry to consider the collective homebuying power of America’s rental market.
Lucarelli said in a statement that he sees this new feature as part of “the business of helping renters.”
“Whether it is the landlords who provide the space, the agents who work with renters or the organizations that in turn support agents such as MLSs — [we] can ultimately play an important part in helping renters transform rent payment obligations into stepping stones toward a better credit score and a more financially sound life,” he said.