Adding rent and Utilities to credit score

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Obi-dan
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Adding rent and Utilities to credit score

Postby Obi-dan » Mon Oct 21, 2013 2:45 pm

Apparently there has been a bill introduced to add rent and utilities to the credit score. I have mixed thoughts about it. I was curious what others thought. Here is an article about it.

http://www.marketwatch.com/story/should-credit-scores-include-rent-and-cable-bills-2013-10-21?siteid=yhoof2
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otter
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Postby otter » Mon Oct 21, 2013 5:47 pm

Politically, I am a libertarian so I oppose the bill as another government intrusion into private enterprise. If a landlord or utility company wanted to today, they could report their customers info to the credit bureaus. Most wouldn't want to bother with the hassle of doing so. Here's some other things to consider:

(1) It costs money to submit info to credit bureaus. Who is that money going to come from? Not the landlord or utility company- they're going to pass it onto us.
(2) The bill is supposed to help those who have no credit, but it would end up hurting them. Why? Because those who have no credit are the same ones who tend to pay their electric bill a day or two late occasionally or live paycheck to paycheck and pay their cable bill right before it gets shut-off. Johnny Q. Thinfile may lament the fact that his utilities aren't on his credit report, but he doesn't realize that one payment made one day late in a year's time would be seen as a bad thing in the world of credit. As the article mentioned, it is a lot easier for a score to go down than go up.
(3) So your landlord has been putting off fixing your leaking sink. One way to show him it really needs fixing is to delay your payment until it is fixed. But fast forward to a time where rent payments are reported to the credit bureau. You don't have any leverage, he has all the leverage... that sink will never get fixed.

This is a bad idea all around...
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Obi-dan
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Postby Obi-dan » Tue Oct 22, 2013 9:43 am

I'm not libertarian but I tend to agree with everything you said. I think my mixed feelings comes from not what gets and doesn't get reported but rather when the report gets used for things other than extending credit, such as insurance actuaries to set rates, employers, landlords (one can look for evictions elsewhere) etc. I would prefer to see restrictions on who can pull your credit.

Thanks for sharing your thoughts. There are just my two cents.
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whit
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Postby whit » Tue Oct 22, 2013 2:40 pm

I don't think it would happen there are too many diff scenarios if anything they should focus on helping educated people on credit and how it works, how it can affect both positively and negatively

I could write a tire ol' essay about this but ehhhh

I see the pros and cons but cons outweigh the pros

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Postby Midori » Tue Oct 22, 2013 8:59 pm

As is pointed out elsewhere, rent is something that is prepaid... not something that is extended to you on credit. Yes, it shows how you handle one of your most important bills, but I'd prefer less intrusiveness as well. If people absolutely want their rent to be factored into their credit score, there are other ways of doing it with all of the "pay your rent with a credit card for a fee" operations out there. It's that "small fee" bit that makes it not worthwhile for a lot of landlords... if it's worth it to a tenant, I suppose they could absorb that 2-4% cost on their own end of the transaction.

I'd be okay with utilities, though, since they're already reported for the bad, so they might as well be reported for the good on a consistent basis.



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