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189

California renters can have monthly payments reflected on their credit scores under new law (www.cbsnews.com)

submitted 1 month ago by [email protected] to c/[email protected]

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[–] [email protected] 2 points 1 month ago* (last edited 1 month ago)

Headline is misleading.

They can opt in to having this reported on their credit report. That doesn't automatically mean any score will reflect it. Lenders pull which credit reports they want, and they keep what they want from credit reports and calculate their own approach. Just shoving this on the credit reports won't necessarily mean all credit reports have it accurately, or force them to use the reports that have this information, or even use this information or any particular score. They likely calculate their own.

This is why sometimes you find that the "score" they have when buying a car or house differs from the score you thought you had.

People should be aware their is no single credit score. All scores are made-up and no standard exists. It's all about the content on the report and how it is factored in.

I'm not saying this isn't good news, but the headline is very misleading and this step forward should be a lot more forward than it is.

[–] [email protected] 4 points 1 month ago (1 children)

Abolish the credit score. US lenders could just used income like they do everywhere else in the world. But then i guess they couldn't discriminate against women, I/POC, and family history.

[–] [email protected] 1 points 1 month ago

Credit scores exist because it's harder to discriminate this way.

[–] [email protected] 11 points 1 month ago

This is only for tenants obligated to pay on a lease, not for month to month tenants with a rental agreement but no lease- also it's for apartment buildings with 16 units minimum.

[–] [email protected] 46 points 1 month ago (3 children)

This is a good idea, and hopefully will help people get a leg up. Better credit scores can save you money by opening up lower interest rates.

[–] [email protected] 12 points 1 month ago

Landlords will be pissed, this makes it easier for them to buy out of the system and reduces rent to purchase ratio.

[–] [email protected] 4 points 1 month ago

i love this; i think i'll move back to california

[–] [email protected] 20 points 1 month ago (1 children)

We started this in Canada earlier this year.

[–] [email protected] 13 points 1 month ago* (last edited 1 month ago)

TIL.

Now I gotta talk to my landlord about registering for it.

Thanks for saying something about it. :)

[–] [email protected] 22 points 1 month ago (2 children)

Meanwhile I have to pay $5 a month to reflect mine

[–] [email protected] 14 points 1 month ago (2 children)

CA landlords can charge their monthly cost or $10, whichever is less.

[–] [email protected] 3 points 1 month ago (1 children)

The only thing I would change is that the landlord is allowed to ONLY charge their exact cost. But otherwise yeah this is a good idea (having your rental payments show or affect your credit score).

[–] [email protected] 3 points 1 month ago (1 children)

Monthly cost or $10, whichever is less, is better. It means the landlord is incentivized to keep costs down. Even if it costs the landlord $50, they can only charge the tenant $10. If it costs them $5, they can only charge the tenant $5. It's a ceiling on the cost.

[–] [email protected] 2 points 1 month ago (1 children)

Maybe I'm misunderstanding.

This is a cost to have your rent showing up on the credit report, correct?

How would the landlord have any control over what they charge?

[–] [email protected] 3 points 1 month ago (1 children)

I assume the landlord uses a service to share rent with the credit report agencies. The landlord can shop around for a cheaper service, or use their cousin who charges $50/tenant but gives the landlord a kickback.

[–] [email protected] 2 points 1 month ago (1 children)

I think assumptions in this case is a bad idea.

If the landlord has a realistic way to control the price then that’s one thing but I would want to see how they control that price. Or if they even have any say in it. If the landlord has no say then the landlord should charge exactly their cost.

[–] [email protected] 2 points 1 month ago (1 children)

I somewhat disagree, because landlords have a say by their sheer number and capital. If credit agencies or reporting services want to gouge landlords, that shouldn't be the tenant's problem and landlords should come together to negotiate lower prices. I much prefer the built-in tenant protection here of a $10 per month cap.

[–] [email protected] 2 points 1 month ago (1 children)

The reality is this will only affect the mom and pop landlords. The large corporations it won't have any affect on. Will ten dollars kill them? No. But if we keep adding things like this where the landlord can't recoup their costs then it will. The large corporations will negotiate a deal for the individual large corporations but the mom and pop operations won't have the bargaining power.

Again I'm not saying ten dollars would kill them. It's the idea of adding fees that a landlord can't recoup that I'm against, because of who it will affect.

Yes I know the landlord can just up the rental price to recover the loss, but a ton of landlords run on a shoe string budget. The corporations can weather that storm easier. One fee probably not a problem. Keep adding fees and limit the ability to raise rent beyond a certain percentage and watch what happens.

In order for the landlords as a whole to get that kind of bargaining power would require the mom and pop landlords to unionize. Does anyone think that kind of union is a good idea?

Take a look at certain areas and see which type of landlord is getting out of the business and which type of landlord is buying more and more land.

I'm not saying this is the only reason for that but it doesn't help.

[–] [email protected] 1 points 1 month ago

Good point and well said. The law in CA only applies to buildings with at least 15 units, it's opt-in so landlords will only have to pay for tenants who opt for it, and there are provisions for canceling the service for tenants who don't pay (then restrictions on their ability to opt-in again). That should help mitigate the impact to mom and pop shops.

[–] [email protected] 6 points 1 month ago

Now that's how you make a law. I love how this is built.

[–] [email protected] 4 points 1 month ago

Same. $4.99/month ooo thanks for the penny.