Digital platforms are transforming the personal finance landscape for renters by emphasizing the importance of leveraging nuanced insights derived from rental payment data, a facet traditionally excluded from credit scoring models.
Among the firms driving this transformation is EasyKnock, a home equity solution platform, which recently partnered with Piñata to offer its customers access to reward and credit-building programs.
Through this collaboration, EasyKnock customers can now benefit from on-time rent payments being reported to credit bureaus, thus enabling them to build credit steadily each month. Additionally, Piñata offers various incentives such as discounts, cashback on purchases, and access to renters insurance, further enhancing renters’ financial well-being.
Jarred Kessler, CEO and founder of EasyKnock, emphasized the significance of this partnership in a recent press release, stating that it provides a “game-changing” opportunity for American renters to “improve their financial well-being while earning rewards.”
Moreover, EasyKnock’s ability to convert home equity into cash can serve as a vital financial resource for asset-rich, cash-poor individuals navigating tough economic conditions, Kessler told PYMNTS in a March 2022 interview, providing a solution that unlocks the potential value stored in their homes.
“The place where most people are going to get their money, if they’re allowed to get it, is their home,” Kessler said. “That’s where we come in.”
The launch of a credit reporting service by financial wellness platform Bloom Credit further underscores the growing trend of digital platforms facilitating credit-building opportunities for renters. As PYMNTS reported in October, rental apps under this initiative — TenantPort by PayUp and Rent App by Visible — will now relay rental payment data to major credit bureaus, enabling responsible tenants to boost their credit profiles through consistent rent payments.
Emphasizing the importance of the service, the company said, “credit history plays a pivotal role in determining an individual’s access to affordable credit” in today’s financial landscape but “unfortunately, a significant portion of consumers, especially those who rent their homes, have been left without a meaningful way to establish credit.”
A study conducted by PYMNTS Intelligence and Sezzle further highlights the pivotal role of credit-builder apps in boosting users’ credit scores and easing their financial wellness path. Notably, users are nearly 80% more likely to achieve a score increase exceeding 100 points compared to those without such tools.
Moreover, the data highlights that credit-builder app users experience greater ease in elevating their credit scores. Nearly 60% of these users find the process effortless, contrasting with only 41% of general consumers who shared similar sentiments. This user-friendly interface likely contributes to their higher success rates.
Furthermore, credit-builder app users exhibit exceptional motivation toward enhancing their credit scores, the study found, with 92% actively pursuing score improvement within the past two years. This level of persistence is not commonly observed among other consumers.
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