Proposed Policy: Fair Use of Credit Checks for Housing and Non-Credit-Based Services
After observing the disconnect between rent payments and credit scores, it became clear that renters who prioritize paying their rent on time often face lower credit scores due to missed payments elsewhere. This creates an unfair situation, where people who are financially responsible with their housing still struggle with poor credit scores because rental payments are not reported to credit bureaus.
This policy proposal is designed to address this issue by:
Prohibiting credit checks for services like housing unless the rental payments are reported to credit bureaus. This ensures credit checks are only used when relevant to credit history.
Encouraging landlords and property management companies to consider alternative metrics, such as a consistent rental payment history, when evaluating applicants.
Advocating for the inclusion of on-time rental payments in credit reporting to provide a fairer representation of a renter’s financial responsibility and ability to manage recurring payments.
By ensuring that rental payments are properly reflected in credit scores, this policy would create a more equitable housing system for renters, protecting them from the unfair penalties caused by discrepancies between their payment history and credit score.