IT News Wire
SACRAMENTO – Governor Gavin Newsom signed Senate Bill 1157, authored by Senator Steven Bradford (D-Gardena). This bill requires landlords managing medium- to large, subsidized, multi-family housing units in California to offer their tenants the option of having their rental payments reported to a major credit bureau.
“This bill, the first of its kind in the nation, starts to correct the longstanding inequity where those with the least resources have to fight the hardest to establish and improve their credit scores,” said Senator Bradford. “Having a good credit score is the first step in helping renters achieve the American dream of homeownership. But, most renters today do not receive a benefit to their credit scores when they consistently pay their rent on time. SB 1157 changes that for some of our most at-risk tenants. Renters and working families have suffered because of COVID-19 and this bill will provide an opportunity for families to responsibly build their credit after this crisis.”
According to the U.S. Census American Community Survey, just over 45% of Californians are renters. Yet, at the present time, although failure to pay one’s rent has a negative impact on one’s credit, most Californians who make on-time rent payments fail to receive any benefit to their credit scores for making those on-time payments. This is true because many landlords do not submit their tenants’ “full-file” (positive and negative) rental payment history to any of the major credit bureaus.
Specifically, SB 1157 requires landlords who manage medium to large multi-family units in California that receive federal, state, or local subsidies to offer each tenant in a subsidized unit the option of having their rental payments reported to a major bureau. By focusing on subsidized housing, the bill is tailored to those tenants likely to receive the greatest benefit from establishing or improving their credit scores.
SB 1157 includes a delayed operative date of July 1, 2021 to allow landlords reasonable time to prepare for implementation.