About five weeks ago, I came across RentBureau, a new company out of Atlanta. These guys are looking to become a fourth credit bureau using rent payments. This is huge for our industry. Why?
- Rent is often your largest expense.
- You don’t get credit for paying rent on time.
- The best predictor of whether someone will pay his rent is if he’s paid it before.
- There’s no way to know the above with any certainty.
- Sure, we call references, but they’re easy to fake.
Because of the disconnection here, we rely on credit reports, landlord/tenant court records, reference calls, Magic 8 balls, etc. to predict whether a given applicant will pay his rent bill.
The problem with a credit bureau for landlords is collecting the information with reliable accuracy, and making money doing it. I met the founder of PRBC, which stands for Pay Rent, Build Credit a couple years ago. He had a similar idea, but couldn’t get the pricing right to make it cheap enough for resellers like us to incorporate rent-payment data for selling to landlords (assuming PRBC could find it in the first place).
I reached out to Harold Solomon, COO at RentBureau, to see how they intended to make a go of it. Automation is the key, and RentBureau is working on pulling payment data straight from the source — the software that landlords use to post and track rent payments. Harold says they can pull from any system you use, as long as you’re not still tracking rents on index cards.
What responsible resident screening company would not want access to this data? It turns out RentBureau is having trouble getting screening companies motivated to change their ways.
I find this shocking, and we immediately put together a plan to bring RentBureau to our users. Stay tuned!