The FICO Fallacy for Renters

Homeowners with mortgages see their credit scores (FICO) go up when they make timely payments and keep their mortgages current.

Renters who pay their monthly rent on time receive no consideration. In fact, not owning a home and not having a mortgage may result in a lower FICO score. This is "credit score" discrimination. It should not be tolerated.

There are millions of renters whose credit scores may keep them from not only qualifying for a mortgage but may also result in "credit score" discriminated because of falsely low credit scores.

This may cause problems if they move into another rental property. It may keep them out of financing for cars and other essential items. It may unfairly burden renters with higher interest rates and more difficult financing plans because of the lower FICO scores.

This suggests that the credit reporting agencies have a responsibility to ensure that the credit profiles of renters are not adversely affected by their tenant status. A timely rental payment should reflect positively on a tenant's credit profile just as a timely mortgage payment improves the FICO score of the homeowner.

In its quest for tenants rights the American Tenants Association intends to delve into this inequity and work with credit reporting agencies and elected representatives to ensure that tenants are not discriminated against because of an unfair reporting method.