Proposed legislation aims to give renters credit where credit is due

A class of credit-invisible Minnesotans — disproportionately low-income residents and people of color — could gain a higher profile for building wealth.

Sponsored by Rep. Samakab Hussein (DFL-St. Paul), HF2123, as amended, would require landlords with 10 or more units to offer tenants the option to report on-time rent payments to credit bureaus.

It was laid over Wednesday by the House Housing Finance and Policy Committee for possible inclusion in a larger bill.

Supporters say the change would let renters use one of their largest and most consistent expenses to establish or strengthen a credit profile. “Credit is not a luxury; it is a gateway to housing, transportation and even employment,” said Kaelah Mundley, community lending coordinator with Exodus Lending.

Unlike mortgages, rent historically has been excluded from standard credit reporting, leaving many renters unscored or underscored and locked out of opportunity that comes with good credit.

Rep. Samakab Hussein

Advocates argue the policy could also help address Minnesota’s persistent racial homeownership gaps, which is one of the largest in the country.

Noting rent is the biggest expense for 1 million residents, Samuel Benda, policy entrepreneur fellow with the African American Leadership Forum, calls the bill a modest state investment that would help more residents “participate in the financial system.”

Tenant participation would be voluntary, free and revocable at any time.

Hussein noted that states including Colorado and New York have enacted similar requirements. California also mandates rent reporting but allows landlords to charge tenants, a cost barrier bill supporters hope to avoid through proposed state grants for landlords to set up a reporting system. The bill would appropriate $500,000 in Fiscal Year 2027 from the General Fund for this purpose.

Landlords currently may choose to report rent voluntarily, and some do, said Cecil Smith, president and CEO of the Minnesota Multi Housing Association. Making a reporting opt-in mandatory raised concerns about compliance burdens, the absence of a safe-harbor provision for good-faith reporting errors, and the costs of implementation.

Credit reporting requires IT upgrades, staff training on federal regulations such as the Fair Credit Reporting Act, and potentially background checks for employees handling sensitive data, he said.

Allowing tenants to opt in and out of reporting concerns Rep. Spencer Igo (R–Wabana Township). “If we don’t include late or missed payments in the law, credit bureaus have a good case to call it credit fraud,” he said.