It’s a simple concept. I’ve had great rental history, and most places use your current landlord as a reference when moving. There should be some sort of potential mandate of reporting every month’s rent payment by both lessor & lessee. Even if it were only applicable after a certain amount of month’s of good payment after the start of a new lease. I’ve had to provide contact info for past landlords when moving, yet, my banks have never cared to incur AT ALL about my 15+ years of perfect rent payments when I’ve applied for both my VA loan and land loans. If our entire world is going to be built on credit, then we need to give credit where credit is due.
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Thank you for bringing up this idea! Its a good discussion. Unfortunately I don’t endorse this idea.
If the creation of a “system” is asking our government to do, it is just creating more bureaucracy. We need less.
If we are talking about mandating the credit bureaus to do this with yet another law, we are asking our government to further intervene in non-governmental business transactions. When the government does that it ineviably has negative impacts. The more we do that, the greater the damage. Healthcare is a good example. Government meddling has caused prices to rise astronomically. Then Obama care forced many companies with so called “Cadillac” plans to reduce employees’ health insurance to the same as the exchanges. It is wrong to take away things that people worked hard for and that is used as a recruiting tool for businesses.
Another good example is the real estate bust not long after 2005. The problem was that the government encouraged lenders to accept mortgages with little or no down payments and with less reliance on credit scores. Many of these people couldn’t afford to keep up the payments and defaulted. So, encouraging lenders to go against their stastical analyses of what makes a reliable loan recipient, ultimately hurt those recipients, real estate agents, the lending institutions and everyone looking to buy or sell houses.
Absolutely agree. Have also thought of this - Someone who pays rent today is often paying more than the cost of a mortgage. At times by double or triple the amount. That makes it very challenging to ever get into a position to purchase a home. On top of that the banks want to either not give a loan or charge the person more through higher interests etc. Makes no sense that someone who pays double and triple the amount of a mortgage consistently on time cannot make loan payments for a mortgage.
Unfortunately credit bureaus are private entities and thus free from government interference.
The whole system of credit reports is a bit bogus IMO. They don’t disclose how they calculate scores. If you apply for a loan & a credit report is run, not only do you take a hit for that, but the lender says they are not allowed to disclose the score to you! You of all people should be able to see this each time. Yes, you can get a free copy each year, but it changes constantly. If you have no debt but pay all your bills, you take a hit. Open a new account, take a hit. Close an account, take a hit. This is insane.