Paying your credit card, car loan or mortgage on time helps your credit score shine and supporters of a proposed Minnesota law want the same perk for renters with a good payment record.

They said it would open more financial doors for marginalized residents. A bill up for consideration in the Legislature requires a landlord overseeing at least 10 units to give tenants the option to have their on-time housing payments reported to credit rating agencies.

Samuel Benda, policy entrepreneur fellow at the African American Leadership Forum, testified in support of the measure, saying rent is the largest monthly expense for more than a million Minnesotans but it does little to help them build wealth.

"This has created the 'credit-invisible class' in which low-income families and communities of color are overrepresented," Benda explained.

He stressed having a lighter credit report limits exacerbates disparities in homeownership opportunities for many. The bill sets aside $500,000 to help landlords develop reporting systems.

The Minnesota Multi Housing Association urged lawmakers to reject the bill, saying the funding is not enough, while noting some housing providers already offer the service voluntarily.

Cecil Smith, president and CEO of the association, said their main concern is the plan only focuses on positive payments and not late or missed payments.

"The result is no longer a neutral reporting system," Smith contended. "It becomes a one-sided data point that does not reflect the true payment record."

Smith argued the plan does not have enough safeguards to protect landlords in the event of a good-faith reporting error. He emphasized it exposes them to unnecessary reporting disputes and compliance risks. The bill is currently at the committee stage.

Source: Public News Service