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If you currently rent or are planning to rent, you are likely familiar with credit bureaus, credit scoring, and credit history. Unfortunately for many, talk of credit scores means uncertainty and anxiety.
Did you know that there is a raging credit disparity in the United States? Over 40 million Americans do not have a traditional credit score – and a high percentage of those are minorities or people in underserved communities?
In fact, this problem goes all the way back to the pay gaps and fight for livable wages (especially highlighted in those groups.)
Even though the credit reporting system is designed to look past all discrimination factors, minority groups are statistically more likely to have a higher ratio of debt to savings, or less on-time payments.
These factors must be addressed in order to ensure that rent remains affordable for those who need it most. If credit is not actively democratized, the problem could worsen as these groups face higher payments due to inadequate scoring or late payment history.
This crisis has reached new heights as more individuals seek affordable housing now than ever before.
Many independent service providers have been working to address this, perhaps the most recent and noteworthy of which are apps that allow consumers to build credit without the risk (or requirements) of opening a credit card or a secured loan.
The most recent example of one of these services can be found via the free app, Piñata. Piñata.ai is a service that acts as the liaison between renters and landlords, and provides renters with in-app and real-life rewards simply for paying rent payments on time.
Piñata.ai debuted at the heart of the pandemic, with a heart of service from the start. This app is free in order to allow access to anyone who needs it – and donates regularly to feed impoverished children across the country.
The best part? There’s no catch. It takes two minutes to sign up, and in addition to the rent rewards, by signing up for Piñata’s new credit reporting program, consumers can get their rent reported to one credit bureau for free each month, or all three bureaus for a small monthly fee.
Services such as MoneyLion and SELF have been pioneering the field of consumer credit building alongside Piñata.ai to ensure users have affordable access to build up their scores. The best part? Neither service requires credit checks.
Now more than ever, people have more access to help to build their score – no matter their situation or prior payment history. Options like this may mark the beginning of democratizing the credit building process, so credit is more readily available to renters and underserved communities.
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This content is brought to you by Hannah Madison.