How Paying The Rent Can Boost Your Credit Score

September 29th, 2011

DailyFinance

By: Sheryl Nance-Nash

Numbers can drive you nuts. Some folks don’t like the digits that reveal their ages, others get frustrated by the ones that make up their bank balances. Some parents can’t figure out the “new math,” and some of us are still a little shaky on the old math. But one number nearly everyone would agree they’d like to raise is their credit score.

In these times when credit is still tight, money is short, and jobs are hard to come by, the benchmark of your credit score carries more weight than ever.

In a sense, your credit score is a crystal ball that’s meant to reveal your character, and building a credit history is key to making that picture clear. Traditionally, that meant taking on debt that you could then pay off, like a mortgage, car loan or credit cards. But in terms of your credit history, paying your rent on time meant nothing.

Now, there’s an option for the nation’s more than 100 million renters — the newly launched RentReporters.com, which verifies your rent payments with your landlord and securely provides the information to Payment Reporting Builds Credit, which then can be included in a FICO Expansion Score.

Experian announced earlier this year that it would accept rent payment data as a traditional credit item on its national credit reports.

“Having been where many of our customers are now, I know firsthand the economic circumstances that can result in a poor credit score,” said Crispin Luna IV, founder and president of RentReporters.com, in a prepared statement. “RentReporters.com allows essentially every renter in the U.S. to take one step closer to homeownership and leverage their rental payments towards a better credit profile.”

What You Need to Know

It’s a fairly simple process to get started: Sign up on the site, provide a few details, and once the data is uploaded, you’re good to go. “You don’t have to worry about destruction or storage of payment records, staying in contact with landlords, or a landlord being unable to rate a tenant’s payment history,” Luna explained to DailyFinance.

The service is free for landlords, but for renters, an annual membership costs $89.95, with a $49.95 renewal fee, or you can pay an initial set-up fee of $39.95 and $5.95 a month.

Is it worth the money? “There are significant fees,” advises Leslie McFadden, associate editor at Bankrate.com. “Compare the cost and benefits of this service to other credit-building methods, such as secured credit cards.”

Generally speaking, the idea is sound and could benefit a lot of people, particularly those who are under-banked or non-banked, says Ken Lin, founder and CEO of CreditKarma.com, a consumer education site.

Still, it’s somewhat uncharted territory. “There is not enough statistical data to determine the absolute relationship of rent payments to credit default,” says Lin. “This type of modeling is not widely used and it is not widely accepted by creditors. Outside of Experian, who is just beginning to test this, you are paying money for something that isn’t widely accepted or proven.”

He also thinks it’s too expensive. “You could spend a bit more and get a secured credit card. Most secured credit card issuers report to all three bureaus, and this is a widely accepted way of building credit, even if you don’t have credit to start.”

Mike Melby, co-founder and CEO of PayDivvy.com, which offers online bill payment services, suggests an alternative: “Many other bill payment companies such as PayDivvy, AccountNow and ReadyDebit offer credit reporting for free, as a part of their bill pay service.”

Lastly, says Lin, rent bureaus are subject to gaming. “Whereas banks have automated credit reporting logic, rent bureaus are subject to landlords who will have inconsistent interpretations of ‘on time.’ They may also be inaccurate because of any number of biases. For example, a renter could report a friend as their landlord to help build credit. Future creditors that rely on credit scores won’t like the subjectivity and human bias when it comes to risk,” warns Lin.

Long term though, any type of payment history will be useful. “Rent is one idea, but probably not the best,” says Lin. “Utilities and mobile services might be much better risk indicators, since they take the human factor out of the report and have equal market penetration. Moreover, these type of payments are more similar to credit risk. For example, you might always pay your rent because housing is a necessity. But cells phones or cable bills are not, and much more similar to how consumers’ prioritize their finances when money is tight.”

Melby offers a more optimistic view. “If you are in a similar situation to many Americans today, you’ve racked up loads of credit card debt and dealt with a lot of late payments, which may have affected your credit score,” he says. “A service like this will not work magic overnight, but it will help over time. Every little bit helps, so seize the opportunity … just make sure you are doing it time and cost effectively.”

Click here for the full report from DailyFinance

The Kevin Trudeau Show: 8-27-11

Today, Kevin explains where every ailment, every sickness, and every disease can be traced back to and how natural remedies are more effective than drugs and surgery.

Self Help:
Prevent Disease
Alternative To Sunlight
Decrease Your Cancer Risk
Get The Nutrition You Are Lacking
Avoid Processed Commercial Meat

Wealth:
51% of Americans Pay No Federal Income Tax
Americans Becoming Incompetent Due To Welfare System
Feds Oppose Ban On Food Stamps For Sodas In NYC

NWO:
Data Dealing Is A Bigger Scandal Than Phone Hacking
Why Do Feds Want To Keep Tucson Shooting Suspect Medicated?

Everything Kevin:
Become An Insider!
Support Kevin!
Kevin is on YouTube!
Sign Up For Kevin’s FREE Podcast
Follow Kevin on Twitter
Become A Fan of Kevin on Facebook

Take Trudeau on the Go! Click here to download this show to your iPod, mp3 player, or PC through iTunes!

Click below to watch The Kevin Trudeau Show!

The Kevin Trudeau Show: 8-22-11

Today, Kevin explains why it is wrong for America to force the wealthy to pay for their mistakes. Plus, find out why the War on Terror is a joke and why food stamps should be abolished!

Self Help:
Decrease Your Cancer Risk
Get The Nutrition You Are Lacking
Avoid Processed Commercial Meat

Health:
Are Vitamin D Levels Linked to Certain Cancers?
Cancer Expert Blames Agencies For Losing War Against Cancer
Are There Toxic Chemicals In Your Kids’ Car Seats? YES!
Processed Meat May Give You Cancer
Chipotle Admits Major Menu Mistake
Why Are Fruits and Veggies Less Nutritious Today?
It’s Easier To Get Prescription Drugs Than You Think!
Lawsuits Pile Up Over Diabetes Drug

Government:
Secret Services Pays to Rent Joe Biden’s House
Former U.S. Officials Make Millions Advocating For Terrorist Organization
Some Immigrants With Criminal Records MIGHT Not Get Deported

Wealth:
Feds Oppose Ban On Food Stamps For Sodas In NYC

NWO:
Data Dealing Is A Bigger Scandal Than Phone Hacking
Why Do Feds Want To Keep Tucson Shooting Suspect Medicated?

Everything Kevin:
Become An Insider!
Support Kevin!
Kevin is on YouTube!
Sign Up For Kevin’s FREE Podcast
Follow Kevin on Twitter
Become A Fan of Kevin on Facebook
Kevin’s Film Club
Kevin’s Book Club

Take Trudeau on the Go! Click here to download this show to your iPod, mp3 player, or PC through iTunes!

Click below to watch The Kevin Trudeau Show!

Secret Services Pays to Rent Joe Biden’s House

August 22, 2011

AOL Real Estate

By: Ann Brenoff

Managing income property is the bane of many a landlord’s existence. But Vice President Joseph R. Biden Jr. has locked in a tenant, on the cottage next to his waterfront home, that likely won’t be bouncing checks or moving out any time soon: The U.S. Secret Service detail that’s hired to protect him.

To recap: Our tax dollars not only pay for the vice president’s protection, they are also feathering his pocket with a steady rent check. Yes, it’s legal. We leave it to the public to decide whether it’s right for the vice president to have snagged this tenant in Greenville, Del., where the rental vacancy rate for 2010 was a whooping 33.6 percent, according to Melissa Kresin, a survey spokesperson at the U.S. Census Bureau. The national vacancy rate is 9.2 percent.

According to a Washington Times story, Biden (shown in the background of the above photo, as a Secret Service agent watches over him) has collected more than $13,000 from the agency charged with protecting him in his waterfront home in a Wilmington suburb. The arrangement came about after a previous tenant moved out. The agency is paying the same rent as the last tenant.

Under federal purchasing documents that the newspaper ferreted out, Biden — listed as a “vendor” — stands to gain up to $66,000 by the time the government contract expires in the fall of 2013.

Taxpayer watchdog groups and others are already jumping on the “what was he thinking?” bandwagon.

Said Leslie Paige, spokeswoman for the Citizens Against Government Waste, “He should be afforded every single protection available to him and his family, as should every vice president and president. But … you’d think the vice president, who shepherded the deficit committee, would think twice about charging the Secret Service rent. Why would he need the money? I don’t get it.”

Biden’s mother lived in the space until her death in January 2010. It was then rented to a private tenant. When that tenant left, the Secret Service took it over after having leased other space in the Wilmington area. The Secret Service is required by law to ensure the safety of current and former national leaders and their families.

Click here for the full report from AOL Real Estate

Joe Biden: Secret Service Covers His Rental Too

August 2nd, 2011

AOL Real Estate

By: Ann Brenoff

Managing income property is the bane of many a landlord’s existence. But Vice President Joseph R. Biden Jr. has locked in a tenant, on the cottage next to his waterfront home, that likely won’t be bouncing checks or moving out any time soon: The U.S. Secret Service detail that’s hired to protect him.

To recap: Our tax dollars not only pay for the vice president’s protection, they are also feathering his pocket with a steady rent check. Yes, it’s legal. We leave it to the public to decide whether it’s right for the vice president to have snagged this tenant in Greenville, Del., where the rental vacancy rate for 2010 was a whooping 33.6 percent, according to Melissa Kresin, a survey spokesperson at the U.S. Census Bureau. The national vacancy rate is 9.2 percent.

According to a Washington Times story, Biden (shown in the background of the above photo, as a Secret Service agent watches over him) has collected more than $13,000 from the agency charged with protecting him in his waterfront home in a Wilmington suburb. The arrangement came about after a previous tenant moved out. The agency is paying the same rent as the last tenant.

Under federal purchasing documents that the newspaper ferreted out, Biden — listed as a “vendor” — stands to gain up to $66,000 by the time the government contract expires in the fall of 2013.

Taxpayer watchdog groups and others are already jumping on the “what was he thinking?” bandwagon.

Said Leslie Paige, spokeswoman for the Citizens Against Government Waste, “He should be afforded every single protection available to him and his family, as should every vice president and president. But … you’d think the vice president, who shepherded the deficit committee, would think twice about charging the Secret Service rent. Why would he need the money? I don’t get it.”

Biden’s mother lived in the space until her death in January 2010. It was then rented to a private tenant. When that tenant left, the Secret Service took it over after having leased other space in the Wilmington area. The Secret Service is required by law to ensure the safety of current and former national leaders and their families.

Click here for the full report from AOL Real Estate

Soaring Costs Force Some Renters To Choose Between Shelter And Food

April 27th, 2011

The Huffington Post

By: Yepoka Yeebo

Around 10 million American households — or one in every four families that rent their homes — could have to choose between paying rent, buying groceries or keeping current with bills, according to a report released Tuesday.

The number of households spending more than 50 percent of their income on rent and bills jumped by 2.6 million over the last decade, according to a Harvard Joint Center for Housing Studies report. Economists generally consider “affordable” rent to cost about 30 percent of a tenant’s income.

When housing costs hit certain levels, many Americans are forced to choose between rent and food. “In real terms, it means more people have less money to spend on household necessities such as food, health care, or savings,” Eric Belsky, director of the Harvard Joint Center for Housing Studies, said in the report. Households which spend 50 percent or more of their income on rent also spend almost 40 percent less on food and over 50 percent less on health care than households with more affordable rent.

“In the last decade, rental housing affordability problems went through the roof,” Belsky said in the report. “And these affordability problems are marching up the income scale,” he added.

Already, rising rents mean the household budgets of working-class and middle-class families are under strain. Growing numbers of middle-income, and lower-middle-income renters are spending between 30 percent and 50 percent of their incomes on rent. And the report found that rents could start to soar as the recovery takes hold.

Belsky said that after a boom, the rental market took a brief hit during the recession. “Rental housing costs went up and up. There was a brief dip in 2009, now they’ve moved up again,” he told The Huffington Post. Affordability could become such a problem, Belsky said, that even financially secure Americans could start to struggle to make rent.

Even before the recession, rent increases and growing bills outpaced many stagnant salaries. Now, with modest improvements in the job market, there is renewed upward pressure on rents. Many former homeowners who faced foreclosure are now looking to rent, and people who ordinarily would have bought homes are struggling with tighter mortgage lending, while others are waiting for home prices to sink even lower.

Click here for the full report from The Huffington Post

To Rent or Buy, That is the Question

October 19th, 2010

FOX News

By: Molly Line

In the midst of a stalled economy it’s a wonder anyone feels like making a big financial purchase like buying a home — long perceived as a large part of the American dream.

But dismal economic reports, rising foreclosures and plummeting home values have done little to deter the hopes of would-be homebuyers. Some are even looking for a bargain, and to take advantage of low interest rates.

But, is it really wiser to buy during a time of economic uncertainty? Or is renting a better bargain?

Cape Cod real estate expert and agent Danny Griffin says now is a great time to make a home purchase, but only if the prospective homebuyer has the capital to make the investment.

“We do get more calls than we’ve ever had for rentals, but first thing we’re going to tell them, or ask them, is have you ever sat down with a mortgage broker and asked, ‘Can I qualify for a loan? Because there is no better time to consider buying,” said Griffin.

Caitlyn Sweeney and Joe Maddalena are shopping for their first place in Marstons Mills, Massachusetts. Both work full time. Joe is an assistant golf course superintendent and Caitlyn is a teacher. She brings in some additional funds by managing a restaurant on weekends. They are determined to escape the rental market and want to take advantage of plummeting home prices, while also enjoying the satisfaction of owning something.

“You’re putting a lot of money into something that’s not yours. You don’t get to change anything, decorate the way you want to, you don’t have a yard, you don’t have extra rooms,” explains Sweeney, who’s looking forward to making her mark on a new place.

While many homebuyers look forward to creating their own individualized space, Maddalena says their plan to buy is more than an emotional decision. They have their finances in order. “I think we’re both at an age now where our jobs are secure, we’ve saved up some money and houses are at reasonable price,” said Maddalena.

“So the smart buyer is coming in now and saying, okay, finally, I can buy these at a normal price again and it’s affordable for me and I can live within my means,” said Griffin.

“It’s already happening in most of the majorly hit markets in the United States, especially Las Vegas, California, Florida — all of the over-inflated places like that are beginning to hold. You’re seeing people come into that marketplace, whether they be first time homebuyers, second homebuyers, they’re beginning to say ‘Hey, this is a reasonable price and I need to be invested in this now.’”

Despite the desire to own a home, renting does have some obvious pluses say experts: most notably no property taxes, no upkeep costs, no paying for a new roof or dishwasher. Some landlords will even change a light bulb. In some communities renting may be the more affordable option.

Trulia, an online real estate tracking site, released its quarterly Rent vs. Buy Index last week, which looks at the costs of home ownership and renting in America’s 50 largest cities. Trulia’s experts compare the average cost of buying a two-bedroom apartment, condo or town home to the cost of renting using the properties listed on the site. Topping the list where rents are cheaper than buying was New York City, followed by Seattle; Fort Worth, Tex.; Omaha, Neb. and Sacramento, Calif.

Trulia’s experts say these cities share a common denominator: they are major regional employment hubs.

“Homebuyers want to live where jobs are and where they believe they’ll be able to get jobs in the future,” said Tara-Nicholle Nelson, a real estate broker and lawyer who focuses on consumer education for Trulia. The economic draw also pushes up prices, making rental rates a much better deal for some consumers.

The index showed home ownership was more affordable than renting in Arlington, Tex.; Fresno, Calif.; Miami and Mesa and Phoenix in Arizona.

In these types of communities, “we see a real pattern of foreclosure hot spots,” said Nelson. “Prices have dropped a lot in these cities and their rental markets have seen a huge influx of renters.” Nelson is quick to point out the index is just a “snapshot in time,” not an indication of what a given family or individual should do.

“Just because a place is on that list doesn’t mean it’s unwise to buy depending on your personal circumstances,” said Nelson, who believes that equation is much more personal and complicated, involving everything from financial assets to time commitments and stability.

Click here for the full report from Fox News

Record Year for Foreclosures as Unemployment Rises

January 14, 2010

My Way News

By Adrian Sainz

A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year as more unemployed and cash-strapped homeowners fall behind on their mortgages.

The number of households that received a foreclosure-related notice rose 21 percent from 2008, RealtyTrac Inc. reported Thursday. One in 45 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions.

In December, more than 349,000 households, or one in 366 homes, were hit with a foreclosure-related notice. That represents a 14 percent spike from November and a 15 percent jump from December 2008.

Banks repossessed more than 92,000 homes, up 19 percent from November. That increase was likely due to lenders working to clear their books at the end of the year, RealtyTrac said.

Stemming the tide of foreclosures is an important step for the real estate market and the economy to recover. Because foreclosures are usually sold at heavy discounts they can lower the value of surrounding properties. Cities lose property tax dollars from empty foreclosures and declining home values, straining local economies. Home prices have stabilized in some cities, but are still down 30 percent nationally from mid-2006.

The foreclosure crisis isn’t letting up. Between 3 and 3.5 million homes are expected to enter some phase of foreclosure this year, said Rick Sharga, senior vice president of Irvine, Calif.-based RealtyTrac, which began tracking the data five years ago.

High foreclosures forced the federal government and several states to come up with plans to prevent or delay foreclosures to help troubled borrowers.

“It was bad, but it could have been much worse, and it probably should have been worse,” Sharga said.

One plan intended to help homeowners is the Obama administration’s loan modification program known as Making Home Affordable. Lenders participating in the program have offered trial loan modifications to 760,000 eligible borrowers since it was launched in March. A loan modification changes the terms of the loan, such as lowering the interest rate, to make the monthly payments more affordable.

As of November, just 31,000 of them had been made permanent. Nearly the same number had dropped out of the program or were found to be ineligible. The Treasury Department will release updated figures Friday.

Economic issues, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

The Mortgage Bankers Association on Wednesday recommended changes to the government’s program to account for borrowers who’ve lost their jobs. The program, for example, should include a suspension of payments as the first step for borrowers with a temporary loss of income.

The government also should refrain from “endless incremental program changes,” the trade association said.

Since April 2009, there have been nine instances where new program requirements were released, and more than 90 clarifications for new or revised forms, reporting changes and policies. The changes forced mortgage companies to implement new procedures and retrain employees, taking away time that could be spent helping borrowers.

The same three states that led the nation in foreclosure rate in December also posted the highest rates for the entire year: Nevada, Arizona and Florida. More than 10 percent of Nevada housing units received at least one foreclosure filing in 2009, with Florida and Arizona following with about 6 percent each.

The other states ranked in the top 10 for the year were California, Utah, Idaho, Georgia, Michigan, Illinois, and Colorado.

Click here for the full report