Americans pay trillions in rent, but few get credit score boost for it

An estimated $1.4 trillion is paid to landlords of residential properties every year in America, but only 20% of those landlords choose to report the rent paid. That has big implications for the credit scores and credit histories of millions of Americans.
Reporting rent paid on time to credit bureaus can significantly boost credit scores, but since it has not traditionally been a common practice, some renters end up having no credit history at all, making them "credit invisible," limiting their ability to get a loan, a car, a house and a lot more. Over 50 million Americans lack a credit history with the three major credit bureaus: Experian, Equifax and TransUnion.
"We're leaving over $5.3 trillion on the table, we've got to do better," said Wemimo Abbey, the CEO and co-founder of Esusu, which was named to the 2025 CNBC Disruptor 50 list, in an interview on CNBC's "Worldwide Exchange" on Wednesday.
Esusu is a credit score reporting service which has partnered with 75% of the largest rental companies and more recently created a direct line for renters to report their rent payments. "We have democratized access because you have a long tail of people who don't live in commercially managed housing," Abbey said.
Esusu has deals with Goldman Sachs, Mercy Housing, and Cushman & Wakefield, and partnerships with Fannie Mae and Freddie Mac, to increase the number of units nationally that report rent as part of credit.
Credit scores, which range on a scale of 300-850, indicate the ability to pay back bills such as credit cards, and manage and limit debt owed. The lower a score, or the lack of any credit score at all, makes lenders hesitant to extend money, or they might charge extreme interest rates on a loan. Some landlords require a credit score on file to determine eligibility for a rental application, and while it's not the only considered data point, it may influence the landlord to not approve an application.
This financial inequity significantly impacts minorities, with approximately 26% of Hispanic consumers and 27% of Black consumers being credit invisible or unscorable, compared to 16% of White and Asian consumers, according to data from Oliver Wyman. Immigrants are also more susceptible to invisibility as their credit file in the U.S. does not take into account their credit history in their origin country.
Esusu founders Abbey and Samir Goel grew up watching their families struggle financially as immigrants from Lagos, Nigeria, and New Delhi, India, respectively, which was a founding motivation for Esusu.
"When we came here, we didn't have a credit score. We went to one of the biggest financial institutions to borrow money; we were turned away and had to go borrow from a predatory lender who wanted to lend at over 400% interest rate," Abbey said. "My mother sold my dad's wedding ring. We borrowed money from church members and that's how we got started."
Abbey said when Esusu started, only 10% of rent payments were reported to credit bureaus. Esusu has established credit scores for 250,000 Americans leading to $50 billion in credit activity, Abbey said.
The startup's valuation has now reached $1 billion based on demand for the services.
Rent is one of the largest expenditures for most Americans who do not own a home. More than 90% of renters pay rent on time, but since it's not reported, there's no record of it.
Reports can be initiated either by the landlord or by the tenant. Commercially managed housing services may already have connections with one or all three credit report services, but may charge a fee to report it.
Renters also have the option to directly connect with rent reporting services like Esusu, which charges a monthly fee of $2.50 to report timely payment on the renter's behalf. The record of the amount paid is expected to show up roughly 30 days after it's been paid.
But paying rent is not enough; it needs to be paid on time. While some agencies may give 30 days to make up for the missed payment, others may not, and that can negatively impact a credit score.
There are some other ways to build credit in addition to the rent reporting for those who lack credit histories or are looking to increase their credit scores. Becoming an authorized user on a family member or friend's credit card is one way. Getting a secured credit card, that has no annual fee, is another option. Using a credit-builder loan, in which banks provide the total loan amount after you've made a certain number of payments, and report your payment activity to the credit bureaus, is also an option for those with limited credit history and those who are credit invisible.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Yahoo

39 minutes ago

• Yahoo

Fed Daly eyes fall for possible policy shift

-- San Francisco Federal Reserve President Mary Daly voiced a cautiously optimistic outlook for monetary policy and economic conditions in a wide-ranging interview on CNBC, citing signs of balanced progress on both inflation and employment. While acknowledging the potential inflationary effects from tariffs and geopolitical uncertainty, Daly affirmed that 'the economy remains in a good place, and policies in a good place.' The May inflation report offered encouragement, according to Daly, particularly in the housing and services sectors, where price moderation has continued. 'The May data just confirmed an ongoing pattern… we saw inflation continue to come down,' she said, calling the developments 'great news, both for our inflation mandate, but also for American families.' Daly outlined three scenarios for how inflation might evolve during the summer, ranging from a delayed spike to muted pass-through effects due to corporate mitigation strategies. 'We're just going to have to wait and see and collect more information,' she noted, adding that feedback from national businesses showed 'a little more optimism, cautious optimism.' Asked about the likelihood of a rate cut in July, Daly signaled a preference for a more patient approach, saying, 'For me, I look more to the fall, and by then we'll have quite a bit more information.' She emphasized that unless the labor market saw meaningful and persistent weakening, immediate easing would be unlikely. On labor availability, Daly said wage growth has remained consistent with long-run economic fundamentals, and firms report improving conditions for hiring. 'Right now, we haven't seen a broad impact… firms are telling me that they have an easier time finding workers today than they did just last year.' Artificial intelligence, another emerging economic variable, has yet to disrupt job markets in a material way, according to Daly's discussions with business leaders. 'They repeat to us that this is not a way to reduce their payrolls as much as… to augment their payrolls,' she said, noting that employers are using AI to increase productivity rather than cut staff. Daly was measured in her assessment of using tariffs as a rationale for policy shifts, saying, 'I never trust just the theory. There's really three things you have to look at: the theory helps us, history also helps us, and then you have to talk to people.' While confident in current policy settings, Daly warned against complacency amid labor market softening, saying, 'If you ask me where we are in the labor market, I would say we're at a point where additional softening could easily turn into weakening, which I don't want to see.' She cautioned against policy inaction based on inflation fears that may never materialize. Related articles Fed Daly eyes fall for possible policy shift Fed keeps rates steady, but sees fewer cuts next year on stagflation concerns WATCH LIVE: Fed Chair Jerome Powell Holds Press Conference Sign in to access your portfolio

CNBC

an hour ago

• CNBC

AI avatars in China just proved they are ace influencers. It only took a duo 7 hours to rake in more than $7 million

Key Points A Chinese entrepreneur raked in $7.65 million after streaming using an interactive digital avatar. That was more than what he earned from his previous livestream, which he hosted personally. "This is a DeepSeek moment for China's entire livestreaming and digital human industry," an analyst said. Chinese influencer Luo Yonghao and co-host Xiao Mu tried out livestreaming on Sunday, June 15, 2025, using interactive digital avatars based on Baidu's generative artificial intelligence model. Screenshot BEIJING — Avatars generated by artificial intelligence are now able to sell more than real people can, according to a collaboration between Chinese tech company Baidu and a popular livestreamer. Luo Yonghao, one of China's earliest and most popular livestreamers, and his co-host Xiao Mu both used digital versions of themselves to interact with viewers in real time for well over six hours on Sunday on Baidu's e-commerce livestreaming platform "Youxuan", the Chinese tech company said. The session raked in 55 million yuan ($7.65 million). In comparison, Luo's first livestream attempt on Youxuan last month, which lasted just over four hours, saw fewer orders for consumer electronics, food and other key products, Baidu said. Luo said that it was his first time using virtual human technology to sell products through livestreaming. "The digital human effect has scared me ... I'm a bit dazed," he told his 1.7 million followers on social media platform Weibo, according to a CNBC translation. Luo started livestreaming in April 2020 on ByteDance's short video app Douyin, in an attempt to pay off debts racked up by his struggling smartphone company Smartisan. His "Be Friends" Douyin livestream account has nearly 24.7 million followers. Luo's and his co-host's avatars were built using Baidu's generative AI model, which learned from five years' worth of videos to mimic their jokes and style, Wu Jialu, head of research at Luo's other company, Be Friends Holding, told CNBC on Wednesday. VIDEO07:49 AI & future of workforce: Andrew Yang on how the technology will impact jobs "This is a DeepSeek moment for China's entire livestreaming and digital human industry," Wu said in Mandarin, translated by CNBC. DeepSeek, China's version of OpenAI, rattled global investors in January with its claims of rivaling ChatGPT at far lower costs and using an open-source approach. AI avatars can sharply reduce costs since companies don't need to hire a large production team or a studio to livestream. The digital avatars can also stream nonstop without needing breaks. "We have always been skeptical about digital people livestreaming," Wu said, noting the company had tried out various kinds of digital humans over the years. But he said that Baidu now offers the best digital human product currently available, compared to the early days of livestreaming e-commerce five or six years ago. A growing industry Livestream shopping took off in China after the pandemic forced businesses to find alternative sales channels. More people are turning to livestreaming to earn money from commissions and virtual gifts amid slower economic growth. Livestreaming generated so many sales on Douyin last year that the app surpassed traditional e-commerce company to become China's second-largest e-commerce platform — and ate into the market share of lead player Alibaba, according to a report from Worldpanel and Bain & Company last week. Both and Alibaba's Taobao also offer livestreaming sales portals. Meanwhile, other Chinese companies, including tech giant Tencent, have developed tools to create digital people that can be used as news anchors. In late 2023, several businesses started trying out virtual human livestreamers during the Singles Day shopping holiday. But analysts have cautioned that products sold via livestreams tend to have a high return rate as they are often impulse purchases. The biggest challenge for using virtual humans to livestream is no longer the technology, but compliance and platform requirements, Wu said. Digital humans need to be trained to adhere to regulations about product advertising, while major livestreaming platforms may have different rules about allowing virtual people to host the sessions, he said. Weekly analysis and insights from Asia's largest economy in your inbox Subscribe now For example, Douyin has rolled out restrictions on using the technology, especially if the virtual people do not interact with viewers. While Luo's next virtual human appearance hasn't been set yet, Wu said he expects it will be very soon. And in the future, he said, digital humans could easily livestream in multiple languages to reach users outside China.

Miami Herald

an hour ago

• Miami Herald

Tony Robbins sends strong message to Americans on 401(k)s

Many Americans preparing for retirement through savings and investments often encounter significant financial hurdles as they work toward a secure and enjoyable future. They eventually come to realize that while Social Security provides a foundational stream of income, it was never designed to fully support every cost of living throughout the entirety of retirement. According to renowned motivational speaker and author Tony Robbins, although 401(k) plans offer valuable opportunities, workers frequently encounter scenarios that could jeopardize their long-term financial well-being. Don't miss the move: Subscribe to TheStreet's free daily newsletter Regularly contributing to retirement accounts that offer tax advantages - such as 401(k) plans and Individual Retirement Accounts (IRAs) - is a smart financial strategy. Taking full advantage of these contributions, particularly with regard to 401(k) plans when an employer match is available, can greatly enhance retirement savings over the long term. Robbins has emphasized the importance of financial awareness when it comes to retirement planning. One of his key messages is a warning to American workers regarding misconceptions about Social Security and 401(k) plans. Related: Jean Chatzky sends strong message to Americans on Social Security A crucial part of effective retirement planning certainly involves understanding how Social Security benefits are determined and carefully choosing when to begin claiming them. By postponing benefits beyond one's full retirement age, retirees can receive higher monthly payouts from the program. Considering this background, Robbins highlights a critical caution about how 401(k) plans are used - urging workers to avoid common pitfalls that could affect their financial futures. Tony Robbins points out that for three decades, companies managing 401(k) plans were not required to reveal how much they were charging in fees. Now that disclosure is mandatory, he believes many providers hide those costs in lengthy, complex documents - making it hard for individuals to truly grasp what they're paying and keeping them largely uninformed. "What the majority of Americans don't realize is that an increase in 1% in fees will cost you 10 years in retirement income," Robbins wrote. More on retirement: Dave Ramsey offers urgent thoughts about MedicareJean Chatzky shares major statement on Social SecurityTony Robbins has blunt words on IRAs,401(k)s Robbins uses a straightforward hypothetical scenario to underscore the long-term impact of investment fees on retirement savings. In his example, three employees - let's call them Employee 1, Employee 2, and Employee 3 - each invest $100,000 at age 35 into separate mutual funds. All three investments generate the same steady annual return of 8%, and none of them withdraw any funds for 30 years. However, each employee is subject to a different annual fee: 1%, 2%, and 3%, respectively. By the time they reach age 65, Robbins clarifies, the variation in fees has created a striking difference in their account balances. Despite identical contributions and returns, Employee 1, who paid the lowest fee, has nearly double the retirement savings of Employee 3, who paid the highest. Related: Dave Ramsey sends strong message to Americans on Medicare Robbins emphasizes that the cost of high investment fees doesn't end at retirement. Using the scenario of each employee needing $60,000 annually to fund their retirement, he notes that the long-term consequences become even clearer. The employee facing the highest fees - Employee 3 - depletes their savings before reaching 75, while Employee 1, who paid the lowest fees, sees their nest egg last until age 95. According to Robbins, this stark contrast demonstrates how even small differences in fees can compound into significant financial disparities. It's a powerful reminder, he says, that being mindful of investment costs isn't just a matter of saving money - it's a crucial step in safeguarding long-term financial security. "I learned about these abuses while writing 'Money: Master the Game,' and it made me so angry that people were getting robbed blind," Robbins wrote. "So I brought in America's Best 401(k)." America's Best 401(k) is a retirement plan provider that says it aims to reduce the high fees commonly associated with traditional 401(k) plans. Robbins asked the firm to asses the 401(k) plan used by his own research company and ended up using their proposed solution. "They showed me that we were paying 276% more than we needed to for the same exact stocks," Robbins wrote. "It saved my employees $5 million in their retirement, and it cost nothing." Related: Shark Tank's Kevin O'Leary warns Americans on 401(k)s The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.