Zillow program helps renters with credit-building payment reporting

FOX 2 (WJBK) - Buying a house should be the goal, but many people are locked out by obstacles.

Nationwide renters spend $600 billion a year, but the payments rarely contribute to building wealth. Now Zillow has introduced a program to help turn that expense into a credit-building tool.

"(We asked) is (there) anything that we can do to help the next generation of home buyers establish credit, understand its importance, and help them have a more accurate record is only going to serve them better in the future," said Jeanette Schneider, president of RE/MAX of Southeastern Michigan.

The future looking a bit brighter for renters bogged down by those monthly payments through a new program. Zillow's new building payment reporting means renters using Zillow to pay their rent can opt in to have their payments reported to a credit bureau at no cost.

"We believe this is a powerful resource regardless of what you choose as far as your housing goals, right," said Amy Wipfler, Zillow. "For some people, renting does end up being the right answer. And for some people, home ownership is the path they want. "

Want a home? you'll need to build credit,

"It's a great opportunity to start contributing to that and allowing renters who pay rent on Zillow to get this benefit for their on-time payments," she said.

The Consumer Financial Protection Bureau shows roughly 26 million Americans are credit invisible, meaning they lack a history with major credit bureaus.

Through Zillow's rent reporting program. Renters will be able to build credit through their most significant monthly expense.

Zillow research highlights an obvious issue, particularly in Black neighborhoods where residents often pay more in rent than they would toward a mortgage. This is due in part to limited credit access.

Reporting on-time rent payments can help renters build credit, higher credit scores can potentially lead to easier loan approvals, better rates for home purchases, credit cards, future rentals, and more.

"Home ownership is really the one of the big keys to generating wealth for yourself and for your family," said Schneider. "Study after study shows, if you own a home, that chances are that your net worth in time is going to be greater than somebody who's a renter,"

"Whatever you can do to be working on those downpayment barriers, working on those credit barriers ahead of time means that the moment that you're ready for home ownership, it'll be more accessible to you," Wipfler said. "And that's part of our vision at Zillow is getting more people home."

Well, when it comes to rent, that expense is just growing typical rents in Detroit are up 3.6% over last year sitting around $1,400.

Head to Zillow.com If you want more information on the program along with how to opt in.