Sue is a homeowner and pays her mortgage and other bills on time like a good credit consumer. Sues on-time mortgage payments are reflected in her credit score profiled by the three major credit bureaus; Equifax, Experian and Trans Union.
Joe on the other hand is a renter, who wants to buy his first home in the near future. He pays his rent on time every month as well as his phone and utility bills. Joe is also a good credit consumer but his on-time payments are not reflected in his credit profiles. Why? Because the major credit reporting agencies are not set up to track this type of payment and therefore they are not reflected in Joes credit score. Chances are good that Joes credit score will be lower than Sues because his on-time rent payments go untracked by the credit bureaus.
As a result Joe will be quoted a higher interest rate and higher fees to his lender when he applies for his first home mortgage. Seems a bit unfair doesnt it? The good news for Joe and other renters like him is that the credit reporting system is about to change.
In a recent Chicago Tribune article, reporter Kenneth R. Harney points to the creation of a new national credit...
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