by Sarika Shetty, CEO & Co-founder, RentenPe
Today, credit building is evolving at a rapid pace. In FY 24-25, banks disbursed loans worth Rs 15.3 lakh crores in the first 11 months. Personal loans comprised a large chunk of this, home loans took up approximately 17% of the total new credit issued. At the same time though, about 35% of India paid rent — nearly 60% in Bengaluru, 48% in Hyderabad and 27% in Mumbai. While those who took loans built or strengthened their credit score, those who paid rent got no such benefit.
However, that scenario seems to be changing with rent finally getting the recognition it deserves. Across India’s urban and semi-urban rental landscape, rent reporting is beginning to emerge as a tool for financial empowerment. By turning routine rent payments into credit-building data, tenants are gradually able to strengthen their credit profiles without borrowing a rupee. With rising awareness around financial inclusion, renters are now realising that their monthly rent — once invisible to credit bureaus — can serve as a reflection of financial discipline. Moreover, it stands as a promising shift for tenants seeking greater credit visibility, and for landlords hoping to encourage consistent as well as on-time payments.
Rent Reporting: The beginning of the future
Rent reporting refers to the process of recording a tenant’s rent payment history and sharing it with financial institutions in a structured manner, in the same way the credit bureaus do it. Till the recent past, credit scores in India were built through credit card use, personal loans, or EMIs. However, rent — one of the most consistent recurring monthly expenses – was not factored in.
Rent reporting aims to fill this gap by creating a rental tradeline. It is a record of rent payments on a tenant’s credit profile. Depending on the structure, rent reporting can include only on-time payments (positive-only reporting). Additionally, it can also reflect delayed and missed payments (full-file reporting). While the concept is relatively new in India, the potential perks for renters are significant.
But why does rent reporting matter?
In recent times, creditworthiness has become a prerequisite for accessing housing loans, credit cards, and even certain employment opportunities. Yet, many Indian renters –especially first-time credit users — lack the formal credit history needed to qualify for these services. This is where rent reporting can be a game-changer. With rent being recognised as a valid indicator of financial responsibility, a non-debt-based pathway to build credit has now opened up. Timely rent payments, when reported at tech-enabled platforms, can help renters steadily grow their credit profiles without borrowing money.
Furthermore, it aligns financial inclusion with real-world behaviour. Rent is often the single largest monthly expense for a renter, making it a natural building block for establishing financial credibility.
Key Benefits for Renters
Rent reporting presents a plethora of benefits to renters. Some of them are as follows:
- Credit building without debt
For those new to credit, especially young professionals and students, rent reporting offers a way to start building a credit score without taking on loans or credit cards. Even a few months of consistent rent payments can demonstrate reliability to lenders.
- Enhanced financial access
Various financial products, such as reduced interest rates on loans, increased credit card limits, and simpler confirmations, can be accessed with a sturdier credit profile. While this improves daily financial well-being, it also facilitates long-term financial planning.
- Better rental mobility
In case tenants have a verifiable rent payment history, they are more likely to be considered for future credit. Renters who can exhibit a history of punctual payments are more likely to be trusted by landlords. Concurring to a study by TransUnion in Colorado, the US, 80 per cent of renters who had their rent payments reported saw an increase in their credit scores.
Early signs in India
While rent reporting is not yet standard in India, it is gaining attention as a concept. One such fintech platform has introduced a tool like Rent Credit Scores, validating rental behaviour while improving credit visibility. These offerings usually emphasise internal scoring systems or pilot collaborations with financial institutions, rather than relying solely on the CIBIL score. Also, they permit users to show proof of previous rental payments. This helps in proving their creditworthiness to the potential landlords. While these measures are still in their nascent stage, they are evolving at a rapid pace in terms of mainstream credit impact.
Incentives for property owners
Although the key benefits of rent reporting are tenant-focused, landlords and property managers also stand to gain various amenities. The prospect of improving credit scores motivates tenants to pay rent on time. This also allows landlords to attract tenants who are financially responsible and credit-conscious.
Additionally, by integrating technology, novel ways are presented to landlords to integrate rent tracking with minimal administrative burden. This is peculiar in multi-unit rental setups. As a result, operations are streamlined while offering a modern amenity to tenants.
The Road Ahead
India’s credit ecosystem is on the verge of transformation. Rent reporting has the potential to become a foundational element in future financial inclusion efforts. Though the current financial landscape is in its fledgling stage, renters are eager to begin their new renting journey. By formalising rental payments into credit behaviour, rent reporting can provide millions of renters a fair chance at financial visibility and stability.
Sarika Shetty is the CEO and co-founder of RentenPe, a tech-enabled market disruptor app which is building India’s first Rent Credit Score (R Score™) and Residence Card (R Card™), aimed at formalizing the residential rental market and promoting financial inclusion through rental data.
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