Why and How to Report a Tenant to the Credit Bureau?
Last Updated: February 2, 2023
As a landlord, you want to protect your investment in the rental property. This includes making sure that your tenant is a good credit risk. One way landlords help each other do that is by reporting any late payments or missed rent payments to the credit bureaus. This ensures that other potential landlords can see how responsible your tenant has been with their past payments.
In this article, we will explain how to report your tenant to a credit bureau and what services are available for landlords and tenants alike.
Why Should You Report Tenants to a Credit Bureau?
There are a few reasons why you, as a landlord, should report tenants to credit bureaus:
Protect Your Investment
There are three types of tenants: the ones you absolutely adore, the ones with the repeatedly late rent payments, and those who are constantly on the verge of being evicted. You’ve put a lot of effort and energy into your rental space, so it’s natural that before you let a tenant live there you’d want to know how a tenant behaved in the previous rental space. By reporting tenants to a credit bureau for any late or missed rent payments, potential landlords will be able to see how responsible your tenant has been in the past with their payments.
Helps the Landlords to Get Their Payment on Time
If you put yourself in your tenant’s shoes, would you miss a rent payment if you knew that this information goes directly to a credit bureau? Of course not. If a tenant knows that their late rent payments will be reported to the credit bureaus, they are more likely to make their payments on time. This could help you avoid having to go through the eviction process. Therefore, the second reason for tenant credit reporting is that it can help you, as a landlord, collect any unpaid rent.
Screen Future Tenants
It’s usually difficult to find the perfect tenant for your place. If all landlords would report their tenant’s payment history, it can help potential landlords find out all they need to know about potential tenants’ payment history. By running a credit history check through screening services on potential tenants, a property manager sees if they have any late or missed rent payments on their records. This could help you avoid renting to a tenant who is likely to miss their rent payments in the future.
|DID YOU KNOW: The rules for reporting to the three major credit bureaus, TransUnion, Equifax, and Experian, are quite rigid. You need to manage a certain number of tenants, for example, before you can report a tenant’s behavior, whether good or bad.|
How to Report a Tenant to a Credit Bureau?
If you have not yet set up rental payment reporting, don’t worry. It’s not very hard to do. All you need to do is follow a few steps which will make a great difference in the way you interact with your tenants.
Register With the Credit Bureaus
The first step is to register with the credit bureaus. You will need to provide them with your personal information as well as your business information. Once registered, you will be able to report any late or missed rent payments.
Report Rent Payments Regularly
Registering allows a landlord to report to the credit bureau. That said, you will need to report the tenants’ information on a regular basis. This can be done by contacting the credit bureau directly or by using a rent-reporting service.
Keep the Documentation as Proof
It is important to keep all of the documentation as proof that you have reported the tenant’s information to the credit bureau. This includes any emails or letters that you have sent to the credit bureau, as well as any confirmation numbers that they have given you.
Important Information Landlords Should Know
Below are some things that every landlord should know if they want to report tenants to a credit bureau:
Reporting Rent Payments to Credit Bureaus Is Not Obligatory
While reporting rent payments to credit bureaus is not obligatory by law, it is something that every landlord should consider doing. By reporting rent payments, landlords can help protect their investment and collect any unpaid rent.
Once You Register an Account, You Need to Report Timely and Accurately
If you decide to report a tenant for late rent payments, it’s your legal responsibility to report the tenant’s information in a timely and accurate manner. This means that you should report any missed rent payments as soon as possible so that the information is kept up to date. Once all debt is paid, you need to inform the credit bureau.
You Should Have the Tenant’s SSN
Your tenant’s Social Security number is one of the main ways that the credit bureau will be able to identify the tenant. That’s why you need it to report bad tenants to credit bureaus. Having the Social Security number can help to prevent fraud or identity theft. Therefore, it is important that you as a landlord ask the tenant for their Social Security number.
You Must Notify the Tenant 30 Days in Advance Before Sending a Negative Report to a Credit Bureau
Most credit reporting agencies require that the tenant be at least 30 days late with their rent payment before you can report them. If more than 30 days have passed you have every right to send a negative report on your tenant if they still haven’t paid their rent.
Make Sure That the Tenant Is Really Late With Payment Before You Decide to Send a Negative Report
Lastly and most importantly, every landlord should be aware of how to report a tenant for non-payment of rent and when. The landlord should make sure that the tenant is extremely late with the rent payment before sending a late rent notice to one of the credit bureaus because it can have a drastic effect on the tenant’s credit report.
|You should report a tenant to a credit bureau because it helps you protect your property, get your payments on time, and screen potential tenants.|
|Reporting tenants is not obligatory by law but very much recommended.|
|You should notify a tenant 30 days before you send the report.|
Rent-Reporting Services Both Tenants and Landlords Can Use
If you need to know how can a landlord report rent payments to a credit bureau, there are a few different rent-reporting services available to both landlords and tenants. Below is a list of some of the most popular rent-reporting services:
Since there is no way for tenants to self-report themselves directly to a credit bureau, they need to use third-party services or so-called self-reporting services. And here’s where RentReporters steps in. It’s a reporting service that fits best for those who want to pay their payments directly to the landlord, without setting up online rent payments.
But can landlords report to credit bureaus through RentReporters? RentReporters work in such a way that the tenant pays directly to the landlord, and the landlord needs to report the payment to the said service. Then RentReporters verifies the payment and reports it only to TransUnion. This firm contacts the landlord every month to verify the tenant’s rent payment information (after the tenant initiates the request).
The signup fees are $94.95 where it collects data for the past two years. After that, the monthly maintenance fee costs $9.95. Additionally, they provide a tenant screening service.
This is one of the most popular tenant credit reporting services available to both landlords and tenants. Esusu Rent is a great choice since it reports to the three major credit bureaus, even giving the option for tenants to build their credit score. Every landlord’s credit reporting about an on-time rent payment on the tenant’s behalf will boost their credit score. Tenants can use this service as an independent renter with an annual fee of $50, or free if they register for the Esusu Rent services through the landlord.
While ClearNow can be used by both landlords and renters, it’s important to know that renters can use it only if the landlord is signed up on the platform. ClearNow was considered the best service provider, with an exquisite BBB rating. It allows renters to have no contact with the landlord, and instead pay their rent online.
But how does a landlord report to this credit agency, and why is it different from the others we’ve mentioned? ClearNow is connected with the renter’s checking or savings account. When the rent is due, the service draws money directly from the account and transfers it to the landlord. That way, the landlord is protected from potential scams, and the tenant doesn’t need to arrange meetings with the landlord or remember when the rent is due.
|DID YOU KNOW: Besides rent-reporting services, there are credit repair services that find mistakes and dispute the same directly with the major credit bureaus.|
By reporting rent payments, landlords can help each other find good tenants, collect any unpaid rent, and screen future tenants. Now that you know why you should report tenants and how to report a tenant for non-payment of rent, you’re ready to be a successful landlord.
If you want to report a tenant to one of the credit bureaus, you can either contact the credit bureau directly or use a credit reporting service. These services will not only help you report a tenant, but they will also help you run credit checks on potential tenants. This is very helpful for screening future tenants.
It’s hard dealing with delinquent tenants, and it’s important that another landlord doesn’t have to go through the same thing you did. The best way to report bad tenants is through a third-party credit agency which will collect the tenant’s debt and report the total debt amount to the credit bureaus.
If you want to know how to report your tenant to the credit bureau, you’ll need to consider a few things. First, you’ll need to register with a credit bureau, then report the tenants’ payments regularly, and finally, keep all the documentation as proof.