Kaiser Permanente is partnering with Credit Builders Alliance to increase access to rent reporting services and attempt to reduce the widening wealth gap in the U.S.
Credit Builders Alliance provides training and consultation to community-based organizations that offer rent reporting. Over the next two years, Kaiser Permanente will provide $450,000 in grant funding to up to 80 organizations working with Credit Builders Alliance to offer rent reporting and other credit-building programs. The offerings will be available in California, Hawaii, Washington, Colorado, Georgia and Maryland, the organization confirmed to Fierce Healthcare.
Reporting on-time rent payments to credit bureaus, Kaiser Permanente says, could help renters build credit to qualify for loans, encourage more on-time rent payments and broaden economic opportunities for renters. A rent reporting program Credit Builders Alliance launched in 2020 in Washington, D.C., helped 75% of participating residents see an improvement in their credit score by an average of 29 points.
“Our goal here is really to create and foster healthy pathways for individuals to live their best life possible,” Stephanie Ledesma, vice president of community health programs for Kaiser Permanente, told Fierce Healthcare. She added that addressing core social determinants of health is “imperative” before issues have an impact downstream.
Renters don’t typically get credit for making on-time rent payments, Credit Builders Alliance argues; that’s one way renters, most of whom are people of color with lower incomes, are locked out of the mainstream economy.
“A lack of credit or bad credit can really cost you since you end up paying more for the same sorts of services than a person with good credit would,” Richard Reeve, chief program officer at Credit Builders Alliance, said in a press release.
Critics have cautioned that if a person with no credit ends up with a very low score, that could harm them even more in the long run. There is also some concern that this type of approach becomes so routine that rent or utility payment data start to get automatically reported, which may reinforce existing disadvantages.
One organization Kaiser Permanente will be working with is Colorado-based Neighbor to Neighbor. Its grant will help the organization cover rent reporting fees and help renters manage their finances.
“We’re really interested in breaking cycles of intergenerational poverty, which are so often tied to credit, access to owning a home, and financial literacy,” Christy Hayes, director of community operations at Neighbor to Neighbor, said in the press release. “For less than $2 a month per person, our residents will have access to rent reporting, including credit building and financial education. It’s a small investment with so much potential.”