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Paying Your Rent On-Time Can Improve Your Credit Rating

Many Americans who pay a large amount of their income in rent, can now benefit from on-time credit history

Good credit history is now essential in a renter’s way of life, it represents consumers and responsible behavior, affecting virtually every financial decision. It plays a major role when buying a house, obtaining a car loan, or negotiating interest rates. Much still needs to be done to get the program available to most property managers and multi-family business owners.

The renter’s credit reporting is at its early stage with less than 10% of renters’ payments reported into the major credit bureaus, but Freddie Mac who is the sponsor of this program has partnered with Esusu to encourage owners of multi-family residences and property managers to report tenants monthly payment rent.

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The standard today is, that rents are reported to credit bureaus is when there is a missed payment that has gone to a collection agency. Freddie Mac’s effort with Esusu can help us flip that script so that renters who do pay on time and in full each month can see a benefit in their credit scores.

A major incentive, Freddie Mac will provide closing cost credits on multifamily loans for owners of multifamily properties who agree to report on-time rental payments through Esusu’s platform. Esusu’s technology delivers rental payment data from property management software to credit bureaus while ensuring compliance with industry standards. This platform eliminates the administrative burden for owners, which has been the single largest hurdle facing industry efforts to report rental data. Freddie Mac also negotiated discounts for the Esusu technology for participating operators.

This effort to make rent count will help solve what has been one of the most persistent challenges facing renters who want to build credit. With an average score of 638, renters are often in the “poor” credit range. A homeowner’s typical score is greater than 717, which opens the door to those greater financial opportunities reserved for those with good credit. This effort helps level the playing field for renters who prioritize making their rental payments on time, month in and month out.

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To start, Esusu will report up to 24 months of on-time rent payments from participating properties to the credit bureaus, resulting in an immediate positive impact on credit scores. The program will automatically unenroll renters when missed payments occur, preventing harm to those who struggle financially. The platform also allows renters to monitor their rental payment data and credit score through Esusu’s website and mobile app.

Freddie Mac’s mission is dedicated to affordable housing, making us uniquely positioned to find the solutions that advance equitable outcomes for renters. This credit-building tool for renters is just one way that Freddie Mac is providing opportunities for wealth creation through housing – regardless of whether you rent or own. Join us in making rent count for millions of households.


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