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Lenders' use of rent data in loan decisions helps homebuyers, but dangers lurk

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GUIDE
Incorporating AI into Strategic Roadmaps Of Credit Unions

NEW YORK

Jul 4, 2022

As Ken Riemer, an Alabama attorney who does pro bono work, recently got ready to meet with residents of the homeless shelter in his neighborhood, he assumed most of their questions would be outside his consumer finance practice, and would perhaps ask about government benefits, family law or criminal issues.


“I was shocked to find out that most of the problems had to do with credit reporting — right down my alley,” he said. Six of the 10 people he met with that day were living in the shelter solely because a rent-related credit reporting issue had shut them out of the housing market. In some cases, this was due to a single late payment.


“These are folks with enough income to pay market, nonsubsidized rent, but were nevertheless forced to move their families into a homeless shelter simply because their credit history disqualified them from renting,” Riemer said.


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