Yesterday I was preparing to teach my first bankruptcy class of the semester, reviewing the Fair Credit Reporting Act. And then last night at a parent conference for my sons' preschool, I ran into another parent who gave me an education about a new niche business related to credit reporting. An Alanta startup called RentBureau collects tenants' apartment rent payment history for use not only by landlords to evaluate prospective tenants, but also for incorporation by the credit reporting agencies into their scoring models. The business model seemed interesting to me: RentBureau collects the information from owners and property managers and makes the entire database available to its reporting members. So members have good incentives not to free ride re reporting. Selling the information to the credit reporting agencies is in the offing as I understand. Transunion also recently announced the creation of RentBridge, its own rent payment history database. See also the report of consumeraffairs.com.
Just for fun, I googled a little to see what comparable firms were out there. I found RentREPORTERS and RentReporting, which take a different approach. They solicit applications from renters, pitching themselves as a free service that enables renters to get their good payment history into their credit reports to improve their credit scores. This model seems to cast the firm as an information aggregator that puts renters and the credit reporting agencies together, whereas RentBureau gathers the information from the landlords' end. I have no idea which model works best (or even details of exactly where the revenues come from). Are there information privacy issues? What's interesting to me is this new enterprise geared to filling information gaps in consumer credit scoring models.
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