Financial wellness platform Bloom Credit launched a credit reporting service for rental payment data.
The company debuted a service that allows rental apps to report rent payments to the three major credit bureaus, coming at a time when many consumers are employing credit-builder tools to improve their scores, according to a Tuesday (Oct. 31) press release.
The service is designed to give consumers with limited credit history the chance to create a stronger credit profile.
“In today’s financial landscape, credit history plays a pivotal role in determining an individual’s access to affordable credit,” the company said in the release. “Unfortunately, a significant portion of consumers, especially those who rent their homes, have been left without a meaningful way to establish credit.”
A small percentage of rental payments are reported to credit bureaus, which is a missed opportunity to recognize consumers for responsible payment history and expand their credit access, per the release.
PYMNTS looked at the use of credit-builder apps by consumers hoping to improve their credit scores in “The Credit Accessibility Series: Declining Purchasing Power Pushes Consumers to Improve Credit Scores,” a PYMNTS Intelligence and Sezzle collaboration.
That study found that these tools have been key in helping boost scores, with credit-builder app users 76% more likely to see a score increase of more than 100 points.
“The data shows that credit-builder app users find it easier to increase their credit scores compared to consumers who are not utilizing such apps,” the study found. “Nearly 60% of these users reported that it was easy for them to improve their credit scores, while only 41% of general consumers who increased their scores shared the same sentiment. This ease of use may be a contributing factor to their higher success rates.”
In addition, credit-builder app users are also highly motivated to increase their scores, with 92% actively attempting to do so in the last two years.
“Credit-builder app users are 44% more likely to have increased their scores by more than 100 points compared to those who are actively trying to raise their scores but not utilizing credit-builder apps,” PYMNTS wrote.