Most landlords aren’t able to report rental payments bad tenants directly to the four major credit reporting agencies. The bureaus require a merchant account to report a tenant’s late payment activity. Many landlords don’t create enough monthly transactions to qualify for this particular support.
Options to report rental payments
So what do you do if you want to report rental payments? You could work with a collections agency to collect on bad debt. But you won’t get the full amount, you’ll only get a portion – and the process can take months.
The ideal choice is to work with an established credit reporting services like Datalinx, LLC. We’ve provide the credit bureau reporting software and expertise for nearly 20 years. We collect tenants’ payment info and report rental payments data to the credit reporting agencies on your behalf. Tenants have an incentive to pay on time and maintain their credit score proactively, rather than be reactive to a negative item on their credit report months after the fact.
Large landlords can report rental payments directly
There are now four major credit agencies: Experian, Equifax, Innovis, and TransUnion. Each allows high-volume landlords to report their lease payments directly every month. However, you need to create a number of payment documents to start reporting.
Equifax, for example, requires a minimum of 500 accounts to be able to report tenant information. Due to these subscription requirements, direct reporting is not usually possible for many landlords. Therefore, using a credit reporting service like Datalinx becomes a good alternative.
Options for smaller landlords
The most effective option is to utilize a credit reporting service like Datalinx, LLC to report rental payments for all your tenants. Knowing that you’re reporting gives them an incentive to pay on time, every month. They can see an improvement to their credit score in a matter of weeks, leading to lower interest rates on their credit cards and things like car loans.
For you, the property manager, you’ll see lower delinquency rates, lower turnover and a reduction in evictions – again, because it’s simple to give your tenants a little bit of information about credit reporting and how it affects them. As a property manager, why wouldn’t you want to do something to reduce problems for yourself while at the same time giving your tenants a benefit for good payment behavior?
Get a civil judgment
If the renter has skipped out without paying rent or you’re suing him for failing to pay, then you may want to sue the tenant to recoup your financial loss. If you get a judgment, the court order becomes public record and
eventually make its way to the credit reporting agencies, however that is not always the case.
The only way to be sure your judgement shows up on the consumer’s credit file is to subscribe to a credit reporting service like Datalinx. A civil court ruling like that could knock 100 points off of a tenant’s credit score and stays on the accounts for seven years. This also ought to alert future landlords to the renter’s previous poor behavior.
The biggest problem with this strategy is the expense. It’s much less costly and much more effective to use a credit reporting service to report the debt to the bureaus directly. To clean up their credit report, they have to pay you the full amount owed. You don’t have to pay any additional fees or split a commission with anyone. Let Datalinx, LLC show you how. Please contact us for more information.
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