The Delaware State Housing Authority reports its rent reporting pilot program, the second in the nation after Colorado, is showing promising results for those who participated.
It sought to record on-time rent payments with credit reporting companies, which state officials say generally resulted in an increased credit score.
“For those who are barred, for any reason or another, from seeking that American dream of home ownership, renting shouldn’t hurt you. Renting should be an opportunity; it should be a financial decision. And by separating renting from the credit report, we continue to see that these challenges would mount, and build.” Lt. Governor Kyle Evans Gay said.
Of the 225 approved applicants, state officials say 56% experienced an increase in their credit score, with an average increase of 9 points.
Among those who didn’t see an increase, rent payments were not a factor.
State officials also shared more specific stories: One renter experienced an increase in credit score from 633 to 664 during their participation and was able to purchase a home in the summer of 2024.
Several of those participants, the state reports, went on to buy their own home. 14% of participants went from sub-prime to prime lending category, which state officials say is important for qualifying for loans and other types of credit.
Delaware State Housing Authority Director Matthew Heckle says financial responsibility should be reflected regardless of housing situation.
“People who own their home and pay a mortgage, the reporting process is pretty straightforward. It’s a positive feedback loop. But if you’re renting you don’t have that benefit most of the time, most of the time your on-time payment for rent doesn’t get recorded. So, that’s what we were trying to push back on here.” he said.
Heckles says the practice benefits landlords too, since providing the incentive of credit score improvements result in more on-time rent payments.
24% of participants chose to continue having their rent payments reported to credit companies for free; state officials say rent reporting will continue in Delaware and encourage tenants to see if they qualify for rent reporting with one of several credit reporting agencies.
