In partnership with Credit Builders Alliance (CBA), Working Solutions and like-minded organizations are supporting Senate Bill 619, which is being introduced by State Senator Ben Hueso. Senate Bill 619 would establish a 3-year, opt-in rent reporting pilot program in declared "Promise Zone" cities throughout the State of California.
We know a good credit history is a necessity in today’s economy, and an individual’s credit score can be the deciding factor for everything from interest rates and other loan terms to whether a rental application is approved or denied, and much more. Approximately 60 million U.S. adults have credit scores lower than 650, and 53 million have no credit scores at all due to little or no borrowing history. According to the Consumer Finance Protection Bureau, approximately 45% of individuals in low-income neighborhoods are ‘credit invisible’ or ‘unscorable.’ Renters are seven times more likely than homeowners to have a minimal credit history that is deemed unscorable by the credit bureaus.
While still relatively new, rent reporting is a proven credit building strategy that allows all households to finally benefit—as many mortgage holders do—from making their on-time monthly housing payments. For example, through CBA's Power of Rent Reporting pilot in partnership with Experian Rent Bureau and eight affordable housing providers, 100 percent of residents that started off with no score became scorable, and on average, residents saw their credit score increase by 23 points. In other pilot sites across the country, we have seen average scores go up as high as 45 points at individual properties.
Working Solutions serves populations with limited, thin, or damaged credit scores, and is partnering with initiatives that support the building and establishing of credit along with our own loan products. We support State Senator Hueso’s Senate Bill 619, believing it helps renters living in affordable and public housing build credit as a strategy for achieving their goals, whatever those may be. We look forward to the bill’s progress.