Landlord Helps Tenant Rebuild Credit Score
Foreclosure, short sale, HAP, HARP, forbearance, and modification; common concepts that are a result of the shift in the real estate paradigm. With terminology such as this, the real estate market has the same appeal as undergoing a root canal. Fear of an unstable market paired with tight lending requirements, has led many to choose renting as opposed to buying.
For tenants that have entered the rental market due to a foreclosure, short sale, or poor credit, do not fret, there is a chance that renting a home can actually help improve your credit score.
In an article I wrote titled; “The Landlord Blues”, I briefly mention that after screening two families for our rental property, we choose a family that had recently lost their home due to foreclosure. While this may seem like a risky decision, I felt that with precautions put in place, they would be the best fit for our home.
Knowing the hardship my tenants had endured, I offered them the opportunity to rebuild their credit by reporting their rental payment history to the credit bureaus. Yes, it is true, landlords can report to credit bureaus. An internet search for companies that allow you to report tenant payment history will lead you to a number of services to choose from; many of which are free of charge.
Advantageous to tenants and landlords alike; you establish a good working relationship in expressing that you care about their financial health, meanwhile providing an incentive for your tenants to make timely payments.
I am happy to report that our tenants have just signed a 3 year Lease Extension and I know that while they are there, they are treating the home as their own. If reporting their payment history will help them repair their credit score and eventually qualify for a home of their own again, then this arrangement will definitely have been a “win-win”.
If you are embarking on the adventure of managing your own property, be sure to read “The Landlord Blues”