Purpose of the Bill

The bill aims to improve tenant credit scores by allowing tenants the option to have their rent payments reported to credit bureaus. This initiative is designed to help tenants build or improve their credit history through their rental payments.

Main Provisions

• Credit Reporting Option: Landlords with more than ten residential rental units are required to offer tenants the option to report their on-time rent payments to credit bureaus. This allows these payments to contribute positively to a tenant's credit score.
• Opt-In Program: Participation in the rent payment reporting program is optional for tenants. Tenants can choose to opt in or out of the program and must be removed from the program within 30 days of opting out. There should be no cost associated with this service for the tenants.
• Landlord Assistance Grants: The bill appropriates $500,000 for fiscal years 2026 and 2027 each, from the state’s general fund, to financially assist landlords with the expenses related to providing this credit reporting service. This includes costs for services, technology, software, and administrative expenses. There's a prioritization for landlords housing tenants with incomes at or below 50% of the area median income.

Significant Changes

• Introduction of a New Requirement: This bill introduces a requirement for certain landlords to offer a potentially beneficial financial service to tenants, aimed at improving housing stability through better credit profiles.
• State-Funded Support: The bill establishes a state-funded grant system to support landlords in implementing the credit reporting option, thereby eliminating financial barriers to compliance.

Reporting Requirements

• Data Collection and Reporting: The Minnesota Housing Finance Agency must collect data on the participation and effectiveness of this program and provide a report to legislative committees overseeing housing by March 1, 2027.

Relevant Terms

• Tenant
• Credit reporting
• Landlord
• Opt-in/opt-out
• Rent payment
• Grants
• Minnesota Housing Finance Agency