California renters can have monthly payments reflected on their credit scores under new law
SACRAMENTO — California Gov. Gavin Newsom on Thursday signed into law a bill requiring landlords of multi-family housing to give tenants the option to opt into having their rent payments reported to the credit bureaus.
Assemblymember Matt Haney (D-San Francisco) authored the bill, which is aimed at helping people improve their credit scores by making on-time monthly rent payments.
"Many renters spend a majority of their income on rent and prioritize their rent payments over all other expenses each month – but their on-time rent payments are never reflected on their credit scores, even when their missed rent payments are," Haney, who is also the chair of the California Legislative Renters Caucus, said when he introduced the bill in June. "This is an unfair practice that is further pushing millions of renters into cycles of debt and poor financial health."
Assembly Bill 2747 only applies to buildings with at least 15 units. Small landlords and assisted housing developments are exempt.
For leases entered into on or after April 1, 2025, landlords must offer the option at the time of the lease agreement and then at least once annually going forward. For leases outstanding as of January 1, 2025, landlords must offer the service to renters no later than April 1, 2025, and then at least once annually.
The law also allows landlords to collect a $10 fee or the cost of providing the service from each tenant who opts in, whichever is less, unless there isn't an actual cost to the landlord.
Renters who opt into the service can opt out with a written request, but cannot opt back in for at least six months.
If a renter opts into the service but fails to pay the fee for 30 days, the landlord can stop the service and the renter must wait six months before being allowed to opt in again. Additionally, landlords can not deduct the unpaid fee from a renter's security deposit and an unpaid fee can not be a reason for a landlord to terminate a lease.
A similar law aimed at lower-income renters in assisted housing developments went into effect in 2021 and is set to expire next summer.