This episode of the Multifamily Innovation Show with Patrick Antrim features Lisa Strauser, who works with CredHub. Antrim points out that rent is increasing at the same time that people are facing financial challenges through the pandemic. Meanwhile, property managers are looking for ways to keep their net operating income up.
CredHub associates rent payments with people’s credit scores. For people who pay on time, that’s a fantastic service because it allows them to benefit from their consistent payments. For those who are often delinquent, it helps to hold them accountable by creating new incentives to pay in full and on time.
(3:30) – More on CredHub
The idea is to help with rent collections, without property managers having to do much extra legwork. That helps both the resident and the property manager.
“Companies can attract higher-quality residents and increase resident satisfaction,” explains Strauser. “These programs provide an opportunity for property management companies to create an additional revenue stream.”
(4:50) – Credit Scores
“How is what you are doing different from what’s in the marketplace?” prompts Antrim.
The answer is simple: CredHub reports both positive and negative feedback, giving property managers some leverage if a resident isn’t making their rent payment a priority. That being said, 99.5% of reporting will be positive, Strauser says.
Rent is most people’s largest monthly payment. If they pay on time at an apartment that uses CredHub, their rent payment will then increase their FICO score by 40 points on average within just the first few months. That can result in tens of thousands of dollars in savings through lower interest rates and better lending options.
There are different plans offered by CredHub. For instance, one comes with identity protection.
(8:10) – Marketing CredHub
Antrim points out that CredHub can be another draw for people who do pay on time. CredHub even helps property managers explain to residents how this helps them, by making monthly data reviews available. That only takes about 15 minutes a month.
(10:00) – Not an If, but a When
New legislation in California levels the playing field a bit between homeowners and renters. Now, government-subsidized properties will have the option to have their rent payments reported, so they benefit the same way people with a mortgage do.
(11:30) – Saving Time and Money
15 minutes a month to go through CredHub saves an enormous amount of time, as well as saving on collections. It saves on evictions, too, Strauser says. She says CredHub reduces delinquency by about 50%.
“Even in COVID, people have held pretty steady in the delinquency lane,” says Strauser. “They haven’t gone way over the top with this.”
Short of people selling properties or leaving the business, CredHub has not had cancellations.
(13:20) – Collections
“Even in a situation where you’re facing eviction, getting to the collection and the impact to move that potential past resident to paying – or at least securing payment – sooner than any eviction process I’ve ever seen,” says Antrim.
“It’s far more productive than chasing delinquencies,” replies Strauser. “When something shows on a credit report, ironically, people find a way to settle up their debt, because there’s a consequence.”
She says some of CredHub’s partners have been able to eliminate some of their collections programs, because CredHub has been enough motivation to get people to pay. That way, you can retain all of your money yourself instead of paying a portion to a collections agency. And, you can retain it sooner.
(16:10) – Oversight
An account manager is assigned to each client, and is responsible for downloading data and getting it into the client’s portal to help them see what’s going on at their apartments.
“The biggest question we get is, ‘Do I have to let my people know?’ and ‘Do I have to get anybody’s permission?’ That’s another no. There’s no permission required,” says Strauser. That being said, she explains CredHub believes in transparency and no one likes surprises, so they have plenty of material to help explain the program to residents and talk to them about how they can benefit.
(19:00) – Starting Out
CredHub gives clients a full year to run through lease renewal dates. That way, there aren’t a ton of upfront charges, because you roll it out as the charge is added to rent.
CredHub has a 24-hour customer service line so property managers can focus on their jobs rather than on the reporting process. Most of those calls they get are from people asking about the service after they see it on their credit report. CredHub itself does not see your personal credit report.
(22:50) – Pricing
CredHub partners with All State, which provides credit monitoring and dark web monitoring, along with a $1 million protection program. That ranges from about $10-$17 person if you bought it stand-alone. But because it’s packaged with credit reporting, you end up paying about half that amount on a per-person basis.
(24:40) – CredHub’s Focus
Antrim points out that property operators are not trained in collections. That’s one unique offering. On top of that, CredHub can go up to two years back to collect on previous tenant debt by going after their credit score. That’s money most property owners would have written off and assumed they would never see.
“This actually improves the industry as a whole so someone else isn’t taking on a resident with outstanding debt. They can’t actually go to another place and rent until they take care of their previous debt,” says Strauser.
(29:50) – Looking Ahead
CredHub hopes to help you roll out a new program for the New Year, aiming to make a difference in 2022.
Antrim’s direct line is (480) 780-2611. Text the word “Credit” and Antrim will send you a report that will help outline more of what was discussed in this episode.
If you’re interested, you can fill out a form on CredHub.com to get more information.
You can also email LStrauser@CredHub.com or find Lisa Strauser on LinkedIn.