New Zillow Feature Builds Credit Score Through Rental Payments

The U.S. real estate portal giant Zillow has today announced the introduction of a feature that will allow renters to contribute to their credit score.

To benefit from the scheme, renters must pay their rent through Zillow's platform and convince their landlords to use the platform as well. Once a renter decides to opt in, Zillow will report on-time rent payments to Experian, a major credit bureau. The service is free and automatic with users able to opt out at any time.

The move comes as many PropTech companies lean into the significant task of helping so-called 'generation rent' onto the housing ladder. Recent Zillow research shows that U.S. renters often pay more in rent than they would toward a mortgage with the issue particularly prevalent among Black communities.

Having monthly rental payments contribute to an individual's credit score would seem to be a no-brainer for credit bureaus but the idea has always been held back by a lack of standardization of data sources and the extra costs involved for landlords and companies in reporting it.

"Every on-time rent payment is a testament to a renter's reliability, yet it's often overlooked in credit reports, and we want to change that," said Michael Sherman, vice president of Zillow Rentals. "This new program is all about acknowledging and supporting consistent financial habits. It ensures renters' largest expense can now work in their favor and potentially help them on their path to finding and securing a place they can call home."