SACRAMENTO, Calif. — California renters will now be able to have their on-time rent payments reflect on their credit score.
It comes after Governor Gavin Newsom signed AB 2747, which requires landlords to give tenants the option to have their on-time rent payments reported to a credit bureau.
“Many renters spend a majority of their income on rent and prioritize their rent payments over all other expenses each month – but their on-time rent payments are never reflected on their credit scores, even when their missed rent payments are. This is an unfair practice that is further pushing millions of renters into cycles of debt and poor financial health,” said Assemblymember Matt Haney.
While a missed payment can show up on a credit report and bring a renter's score down, it doesn't reflect as a positive when those rent payments are made regularly.
A higher credit score can impact how a person is able to borrow money or apply for a credit card. It can also impact their interest rate for said loan or credit card.
Opting in for the positive report can help renters improve their scores.
That being said, landlords can also collect a fee of $10 or the actual cost of rent reporting, whichever is less from the tenant. The bill doesn't impact small landlords; it applies to buildings with more than 15 units.
