Some New Yorkers who pay rent on time can increase their credit scores through a new pilot program
Some New Yorkers now have the opportunity to improve their credit scores just by paying their rent on time.
The pilot program through Mayor Eric Adams' "" initiative is geared towards tenants who live in affordable housing and will reach about 500 households. Their rent payments will be reported to major credit bureaus through a free platform.
This is all part of the city's to help more New Yorkers become homeowners.
The pilot program is expected to run for the next 15 months. Tenants can decide if they want to opt in.
Pros and cons of rent reporting pilot
"If this is reported to the credit bureaus, the three bureaus are keeping track, in a few months, you should see your credit score rise right away, so this is something that would take immediate effect," said economist Timothy Malefyt, with the Fordham Gabelli School of Business.
Malefyt says transparent data practices are critical, however, and tenants should be fully informed about the risks and benefits.
"What if a tenant missed payment and there's a late payment? This could adversely affect their credit score," he said.
New Yorkers who spoke to CBS News New York saw pros and cons to the idea.
"People living in apartments and does not get no reward for paying their rent on time," Harlem resident Ron R. said.
"That sounds good for the people," Harlem resident DyQuan Norman said.
"It's the political time of year so they gonna talk, talk, talk, but then it's totally different when it happens," Harlem resident Alisa Figueroa said. "It may not benefit the poor."
