New York Credit Scores May Eventually Benefit from Timely Rent Payments

It seems long overdue, but New York credit scores may eventually benefit from timely rent payments. Here is the latest on the topic.

New York City comptroller, Scott M. Stringer, believes that hundreds of thousands of New York renters deserve better credit scores. It is an established fact that New York City is overwhelmingly filled with renters. Space is precious in this very crowded city, and most of its residents embrace apartment life. However, rent payments typically don’t count toward credit score building. Stringer thinks this is unfair. He believes that New Yorkers who work hard to pay their rent on time every month deserve better credit scores for their efforts. He and his supporters also think that improved credit could pull a lot of New York renters out of poverty and into the middle class. On the other hand, those who oppose reporting rent payments to the credit bureaus argue that it could do more harm than good.

How Improved Credit Scores Might Help Low-Income Renters in New York

Unfortunately, New York consumers with no credit or bad credit often pay more for car insurance, cell phone service, and certain utilities. For New Yorkers struggling with both low incomes and low credit scores, this is bad news. This knowledge prompted Stinger to study the possible effects of reporting timely rent payments to the credit bureaus.

The comptroller and his office staff looked at a sampling of tenants who pay less than $2,000 a month. What they found was that about 76% of these renters would see big improvements in their credit scores if their rent payments were reported.

Of course, reporting rent payments to the major credit bureaus isn’t a new idea in New York. In fact, the New York City Housing Authority (NYCHA) already has a pilot rent-reporting program. So far, however, this program has failed to gain much traction amount tenants and landlords. This is why Stringer wants to expand the NYCHA’s rent-reporting efforts with a stronger recruitment plan.

In Stringer’s studies, it was noted that 30% of the low-income renters observed would get a credit score for the first time once their rent payments were reported. Analysts predict that most of these new credit scores would fall into the 700 range, which qualifies as “good credit.” Normally, a credit score of 700 qualifies New York consumers for competitive interest rates and low car insurance premiums. So, it is arguable that a credit score boost could help low-income New Yorkers escape poverty.

Potential Drawbacks to Reporting Rent Payments in New York

Clearly, Scott M. Stringer and his supporters feel strongly about their position on rent-reporting. Advocates of the practice believe that reporting rent payments to the credit bureaus would help all New York renters, especially low-income tenants. Yet, those who oppose rent-reporting argue that the practice could do more harm than good to underserved New Yorkers.

First, detractors point out that withholding rent payments is a common last-resort measure among those living in poor housing conditions. Often, this is the only muscle underserved tenants have against bad landlords who fail to provide repairs or services. These tenants may balk at the idea of having their rent payments reported, and for good reason.

Also, the credit bureaus normally charge fees to landlords who report rent payments. In turn, these landlords may pass these fees onto their tenants. For low-income New Yorkers already struggling to pay rent, additional charges and fees are never welcome. Truly, every dollar counts to individuals whose budgets are stretched to capacity. Even though good credit scores could save them money in the future, they need the money right now to help cover basic expenses.

How All New Yorkers Can Improve their Credit Scores for Free

Any New York consumer looking to improve their credit score should keep careful tabs on their credit reports. Unfortunately, about 80% of New York credit reports contain errors created by creditors and the credit bureaus. Also, many of these inaccuracies are significant enough to bring down credit scores.

Luckily, a federal statute known as the Fair Credit Reporting Act (FCRA) entitles all consumers to error-free credit reports. However, in order to clear your credit reports of mistakes, you must check them and find the inaccuracies. Under the Fair and Accurate Credit Transactions Act (FACTA), you may do this for free once every 12 months. Just go to www.annualcreditreport.com to request credit reports from TransUnion, Equifax, and Experian.

If, while going over your credit reports, you find credit score harming errors, contact Credit Repair Lawyers of America in New York. This way, you don’t have to handle the dispute process on your own. Instead, an experienced credit attorney will solve your credit issues and get you clean credit reports – for free.

The Free and Legal Way to Get Better Credit in New York

Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Carl Schwartz at (646) 859-3045 or sending him a message through our contact page.

For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/credit-repair-free/.