Credit Reports to Screen New Buyers

Using Credit Reports to screen new buyers with HOA payment history

Tenant Credit Reports to Include New Information

When using credit reports to screen new buyers, property managers and associations will soon see more information.  Homeowner Association (HOA) payments will be included on credit reports.  Sperlonga Data & Analytics, a credit data aggregator, announced an agreement to furnish homeowner association payment and account status data to Equifax, one of the three major credit reporting agencies along with Transunion and Experian.

Homeowner Association Payments

Homeowner associations and property management companies collect about $70 billion in HOA payments each year from nearly 333,000 community associations, according to the Community Associations Institute.  Unlike the mortgage, insurance and tax costs homeowners must pay, HOA fees aren’t reported to credit bureaus. Until now.

Credit Scoring Industry

The credit scoring industry has discussed adding items like rent payments and utility bills to credit reports and scores as a way of giving more people access to credit. “Introducing new sources of data beyond what has traditionally been found on credit files can provide additional insight into a consumer’s financial behavior and help deliver expanded credit access,” says Mike Gardner, senior vice president at Equifax.

Using Credit Reports to Screen New Buyers

“Until now, HOA payments have gone largely unreported to the national credit reporting agencies. Our service will help elevate association payments to the same level of importance as the consumer’s other financial obligations like residential mortgages, auto loans and credit card payments,” said Matt Martin, chairman and founder of Sperlonga. “Property owners that pay HOA fees on time should begin to see the similar impact to their credit reports as they would with other payment obligations traditionally found in a credit report, while associations and property management companies should begin to see reduced delinquencies and improved cash flow. Our goal is to empower homeowner associations and management companies with the same credit reporting tool that banks and lenders already use to manage consumer debt and credit-related payments.”

Effect on Credit Reports

For homeowners, those who are late or delinquent on HOA payments should expect to see a negative effect on their credit report and score, just as if they had missed a mortgage payment.  Likewise, homeowners who make their HOA payments timely may soon see a positive effect on their credit report and credit score. Using credit reports to screen new buyers will have an impact on applicant screening.

Consumer Copy Credit Report

Sales and lease applicants have a legal right to access the information consumer reporting agencies collect and dispute any inaccuracies. When requested, providing an applicant their consumer copy is easily done in the applycheck online system.  First view the report, then scroll down to Disclosure and Forms.  Click on consumer copy and email it.  The report will include a cover letter and A Summary of Your Rights Under the Fair Credit Reporting as required by law. More information can be found regarding at the Fair Credit Reporting Act.