Reporting late rent to Credit Bureaus

15 Replies

I have a couple of past due tenants (include 2 who have moved out). I want to report to the Credit Bureaus -- has anyone used Rent Recovery Service or any of the other services? 

I go through the LPA... but you have to have done some ground work prior to make it easier on yourself. Jordan, did you either A) collect their SSN on their application or some other method; B) Did you have them sign a credit disclosure notice? and C) Does it mention in their lease that you will report late or non-payment to credit bureaus and or Tenant agencies? 

Alex

Alex R. - I did collect the SSN and have a notice on the lease that I can report it. I do not recall having them sign a credit disclosure notice. Would that be an issue?

It might but I think you've done your due diligence in having it in the lease and having their SSN, you can try to proceed with it. However, you should start including a dedicated 'Disclosure Notice: Credit Reporting and Tenant Performance', notice, which you would include when they first sign the lease. Landlords don't have very much success with debt collections for rent, so any little advantage you can gain to make it easier on your part and convey to the Tenant what the consequences are should be taken. With that said your lease might do since it does have that clause in there, but you again you should not only include a clause but a dedicated notice as well. As far as actually reporting it you can pay a third part to report it to the main 3 for you... I'm not quite sure you can report it directly to them yourself but you can definitely call them and find out. I personally use the LPA for that. 

Originally posted by Alex R.:

It might but I think you've done your due diligence in having it in the lease and having their SSN, you can try to proceed with it. However, you should start including a dedicated 'Disclosure Notice: Credit Reporting and Tenant Performance', notice, which you would include when they first sign the lease. Landlords don't have very much success with debt collections for rent, so any little advantage you can gain to make it easier on your part and convey to the Tenant what the consequences are should be taken. With that said your lease might do since it does have that clause in there, but you again you should not only include a clause but a dedicated notice as well. As far as actually reporting it you can pay a third part to report it to the main 3 for you... I'm not quite sure you can report it directly to them yourself but you can definitely call them and find out. I personally use the LPA for that. 

 Thanks, I will now include this disclosure as part of my lease and screening process!

@Jordan Sand  I use Mr Landlord, and their service allows you to report it to credit bureaus once it's 30 days late.  Note to get started with an account it requires a fair amount of paperwork plus a site visit to your home to confirm who you are plus security features of your home.  They check things like locking filing cabinets, paper shredder, password protected computer, to make sure the SS# are secure.

I've used them for a few years now and have reported a few tenants (I primarily use them to run credit reports on potential tenants).  

I'd be interested in what other services people have used.  I've heard of Rent Recovery but never tried them.

- Tom

@Jordan Sand

I've seen rent appear on credit reports, but never JUST when someone is late. I'm not saying it can't be done, just that I've never seen it.

And, kind of at an ethical level, I'm not sure it's fair to ONLY report tenants when/if they are late, without letting tenants doing the right thing and paying on time benefit from that on-time payment history. IMO, if you're going to report your naughty tenants when they are late, you should similarly report good tenants every single month when they pay on time. Carrots and sticks. 

How would you like it if your mortgage lender (& other creditors) never reported your on-time payments, and then one month when you were late suddenly they reported that? It would be literally impossible to have good credit -- you would either have no credit (because no one reports) or horrible credit (because they only report bad things).

Originally posted by @Chris Mason :

@Jordan Sand

I've seen rent appear on credit reports, but never JUST when someone is late. I'm not saying it can't be done, just that I've never seen it.

And, kind of at an ethical level, I'm not sure it's fair to ONLY report tenants when/if they are late, without letting tenants doing the right thing and paying on time benefit from that on-time payment history. IMO, if you're going to report your naughty tenants when they are late, you should similarly report good tenants every single month when they pay on time. Carrots and sticks. 

How would you like it if your mortgage lender (& other creditors) never reported your on-time payments, and then one month when you were late suddenly they reported that? It would be literally impossible to have good credit -- you would either have no credit (because no one reports) or horrible credit (because they only report bad things).

 Hi Jordan, we report rent payments, however as Chris noted we are not able to report just delinquent payments without reporting the regular payments for a tenant after they opt-in for credit reporting.  We have looked into reporting just delinquent payments and the credit bureau we are currently working with said typically on a collection company could report just delinquent payments for a tenant.  So working with a collection company is your best bet it sounds like.  Hopefully other BPers have some recommendations for a collection company that can report for you.

Originally posted by @Tom S. :

@Jordan Sand  I use Mr Landlord, and their service allows you to report it to credit bureaus once it's 30 days late.  Note to get started with an account it requires a fair amount of paperwork plus a site visit to your home to confirm who you are plus security features of your home.  They check things like locking filing cabinets, paper shredder, password protected computer, to make sure the SS# are secure.

I've used them for a few years now and have reported a few tenants (I primarily use them to run credit reports on potential tenants).  

I'd be interested in what other services people have used.  I've heard of Rent Recovery but never tried them.

- Tom

 Tom, would you recommend Mr. Landlord for credit reporting. I use LPA but have not had to report any of my Tenants. Thoughts?

Alex R.  Yes, I would recommend them, although my credit report access is only for Transunion (because that's what I applied for), so they only report to Transunion.  It's not all three bureaus by default.

Also to clarify on my above post, I only report after the tenants have moved out and after applying security deposit,  they still owe me money and haven't made an effort to pay it after 30 days.  

Hope that helps!

- Tom

@Donna Talley  

Sure..... this is the wording we include in my lease:

"5.     Report to Credit/Tenant Agencies. Tenant is hereby notified that a nonpayment, late payment or breach of any of the terms of this rental agreement may be submitted/reported to a credit and/or tenant reporting agency, and may create a negative credit record on Tenant’s credit report."

Additionally, as I mentioned above I also have a separate credit disclosure form that is included in the lease/contract packet. I've copied an pasted it below in short order but of course you would need to organize it and format it accordingly... I hope this helps, I'm open to any suggestions anyone else may have.

 Disclosure Notice:

Credit Reporting and Tenant Performance

Tenant: Name Here

Address: 

Social Security #:

Telephone #: Phone Number

Rental applied for:

Lessor / Agent/ Landlord(s): 

Credit and Tenant Reporting Statement

Landlords engaged in the rental of housing and collection of rent may report and share positive and negative payment information with credit bureaus, tenant reporting agencies, other landlords and financial institutions.

The prospective Tenant understands that the above named prospective Landlord may report various tenant and credit information to national tenant and credit reporting bureaus including but not limited to Experian, TransUnion, Equifax and The National Tenant Rating Bureau.

Positive or negative rental history will be determined by the following factors:

  • Rent payment record
  • Cleanliness and upkeep of rental unit
  • Overall tenant performance and cooperation

Furthermore, I declare under the penalty of perjury that the information I have given on my application and verbally is true and correct.

------------------------------------

 Add signature and date blocks

Here's what we have.

This disclaimer is at the bottom of our applications, before the signature line:

AUTHORIZATION TO RELEASE INFORMATION— The landlord or landlord’s representative who will verify information is <you or your agent>, Property Manager, <your entity here>, LLC. By signing below, applicant(s) give permission to (1) current and former employers to release any information about applicants’ employment history and income history to the above named person; (2) current and former landlords to release any information about applicants’ rental history to the above named person;(3) current and former mortgage lenders on property that applicants’ own or have owned to release any information about mortgage payment history to the above named person;(4) bank, savings and loan, or credit union to provide a verification of funds that applicants’ have on deposit to the above named person, and (5) to the above named person to obtain a copy of applicants’ consumer report (credit report)from any consumer reporting agency and to obtain criminal background information about applicants. All such information hereon, and released as authorized above, will be kept confidential. APPLICANT REPRESENTS THAT THE INFORMATION SET FORTH ON THIS APPLICATION IS TRUE AND COMPLETE. Material misrepresentations on the Application will constitute a default under the Lease or Rental Agreement between the parties.

Here is the paragraph in our lease:

______ 28. CREDIT REPORTS:We have the right to obtain credit and any other reports on you which we may deem appropriate until all of your obligations under this lease are fulfilled. Upon your written request, we will inform you of the name and address of each agency from which a credit report is obtained. We have the right to report to others our credit and other experience with you.