A recently enacted California law, AB 2747, is changing the game for landlords, property managers, and tenants alike. Under this new legislation, certain landlords must now report rent payments to at least one nationwide consumer reporting agency or credit bureau if the tenant requests it.
This shift is designed to help renters build credit scores by including on-time rent payments in their consumer credit reports, just like mortgage or car payments.
This article will explore what AB 2747 means for landlords and tenants, how reporting rent payments can affect a person’s credit score, and how you can comply with the new requirements using property management software or a rent payment processing system. Read on.
Overview of AB 2747 Requirements
Starting April 1, 2025, California landlords who own or manage a residential rental building with 15 or more units must start reporting rent payments to at least one consumer reporting agency, like the major credit bureaus, upon request. However, the rule applies regardless of unit count if you own multiple rental properties.
If the building is owned by a limited liability company or a real estate investment trust, this rule applies to buildings with 5 or more units.
Landlords must inform tenants in new lease agreements or addendums to existing leases that their rent payments can be reported if the tenant elects to do so.
This way, tenants know in advance that they have the option for credit reporting. It should be noted that both on-time and late payments will be reported. However, reporting rent payments still helps tenants build good credit and encourages paying rent on time.
Which Landlords Are Exempt?
- Landlords with fewer than 15 units in a single residential property
- Rental units from a building being used as the primary residence for the owner or a family member
- Owners of government-subsidized housing
Even though not required, smaller landlords can still participate voluntarily and offer positive rental payment reporting to attract credit-conscious tenants.
The Purpose of the Law
The goal of AB 2747 is to help tenants by giving them credit for on-time rent payments. In the past, rental payment information usually didn’t appear on consumer credit reports unless the account was late or sent to collections. This puts renters at a disadvantage compared to people who build credit by making mortgage or car payments.
With AB 2747, landlords can report positive rent payments to at least one of the three major credit bureaus, just like how credit card companies or mortgage lenders report payment history. This new rent reporting helps tenants improve their credit scores by recognizing their on-time rent payments.
How Rent Reporting Works
Using a property management software system or an integrated rent payment processing system, California landlords can easily report rent payments to a consumer reporting agency. The credit bureaus receive and include this rental payment information in the tenant’s consumer credit reports, helping build a clear payment history.
This new rent reporting system benefits renters because it counts only your payments. Roommates, co-tenants, or family members living in the same rental or lease agreement don’t affect your credit history. The credit you build comes solely from your on-time rent payments, making it a valuable way to demonstrate financial responsibility and improve your credit scores.
What Happens When Tenants Fail to Pay?
When a tenant fails to make on-time rent payments, landlords can also report this negative information. Just like with missed mortgage payments or other financial obligations, missed rent can end up hurting tenants' credit scores.
Landlords must handle this process with care. They must inform tenants about upcoming reporting, allow correction, and follow existing legal protections before sharing late payments with a credit bureau.
Tools for Landlords to Comply
Landlords can use tools such as:
- Property management software with built-in reporting
- Third-party vendors approved by consumer credit reporting agencies
- Platforms integrated with the three credit bureaus
Landlords may charge tenants a monthly fee for the reporting service if disclosed properly in the lease agreement.
Advantages of the New Rent Reporting Law
While AB 2747 is designed to support tenants, it also brings several advantages to landlords:
- When tenants know their rental payments are being reported to credit bureaus, they’re more likely to pay on time.
- The risk of rent delinquency decreases because tenants want to avoid negative marks on their credit reports.
- Positive rental payment reporting attracts financially responsible tenants who care about building credit.
- Including rent reporting in the lease agreement helps position the property as modern and tenant-friendly.
- Property management software makes it easier to track and report rent payments accurately.
- Tenants who benefit from positive reporting are more likely to renew their leases, improving retention.
- A documented rent payment history provides valuable leverage during disputes over unpaid rent or security deposits.
How It Can Help Tenants Succeed
Tenants now have the opportunity to build a strong credit history by paying rent. Regular, on-time rent payments reported to major credit bureaus can help tenants qualify for a major loan, secure better interest rates, or even get approval for future rentals.
Reporting rent payments through a nationwide consumer reporting agency means tenants’ positive rental payment information is shared, helping improve their credit scores.
To maximize new rent reporting, tenants should review their rental or lease agreement to see if rent payment reporting is included. Making on-time payments is key to maximizing positive rental payment reporting. Tenants can also ask their landlord if they offer new rent reporting or if it can be added to the lease agreement.
Tenants have protections to ensure fair reporting. If a tenant makes deductions they believe are valid or if there is a dispute involving the tenant’s security deposit, landlords must avoid rushing to report negative data.
Tenants have the right to submit a written request to delay or correct inaccurate payment data. This process follows the law that regulates consumer credit reports and protects tenants when their rent payment information is shared with consumer credit reporting agencies.
Why AB 2747 Matters for Landlords and Tenants Alike
AB 2747 represents a meaningful step forward for both landlords and tenants in California. By making rent reporting more accessible, the law gives tenants the opportunity to build credit through on-time rent payments. At the same time, it helps landlords reduce late payments, attract financially responsible renters, and strengthen lease agreements with added value.
When supported by property management software and accurate payment tracking, reporting rent payments becomes easier and more beneficial for everyone involved. Landlords gain a powerful tool for improving rent collection and tenant retention, while tenants get a fair chance to boost their credit scores through the payments they’re already making.
In short, AB 2747 encourages greater financial transparency and responsibility. For landlords who stay informed and adapt, it’s not just compliance but also a smart move for long-term success.
At HBR Rentals, we’re here to help you stay ahead of California’s changing rental laws while protecting your bottom line. From compliance support to full-service property management in Tracy and beyond, our team makes it easy to succeed.
Contact us today to learn how we can help streamline your rental operations and maximize your returns.
Frequently Asked Questions
Q1: Can landlords charge tenants a fee for reporting rent payments to credit bureaus?
No, AB 2747 limits fees related to rent reporting. Landlords can only charge a small monthly fee, capped by state law, to cover the cost of rent payment processing and reporting.
Q2: How soon after receiving rent payments must landlords report them to credit bureaus?
Landlords must follow California’s specific timelines for reporting, which generally require submitting rent payment information regularly—often monthly—to ensure credit reports stay up to date.
Q3: What happens if a tenant disputes the rent payment information reported to a credit bureau?
If a tenant disputes the accuracy of rent payment data, landlords must investigate the claim promptly. If errors are found, landlords are responsible for correcting the information with the credit bureaus to protect the tenant’s credit score.
