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An initiative launched in 2021 between Freddie Mac and financial technology firm Esusu to help renters build credit with on-time rent reporting is paying dividends.

According to newly released data, the initiative has been offered to over 240,000 housing units and has led to the creation of 27,393 new credit scores for renters who had previously been credit invisible.

In addition, renters who have seen their credit scores improve as a result of their on-time payments may benefit from increased access to lines of credit with more favorable terms. The initiative also has unlocked over $2 billion in capital for low- to moderate-income renters, providing access to auto and student loans as well as mortgages.

“It is humbling to see our goal of making the American dream accessible come to fruition, and we are immensely proud to see the tangible effects that our collaboration with Freddie Mac has had for residents and property owners alike,” said Esusu co-founders and co-CEOs Wemimo Abbey and Samir Goel. “Together, we’ve witnessed over 27,000 renters establish credit scores and hundreds of thousands see credit improvement. This has enabled many renters to access quality auto, home, and student loan products for the first time to better their financial futures.”

They added that this is just the start of the initiative’s potential impact, saying, “We look forward to continuing to expand access to financial tools and working together toward creating greater financial equity.”

Some of the key findings from the analysis of an anonymized data set for those enrolled include:

  • An average credit score increase of 46 points;
  • Over $2.4 billion in capital access created;
  • Over $1.4 billion in mortgage loans received; and
  • 16,900 auto loans, 3,393 mortgage loans, and 5,618 student loans accessed.

“Working together with Esusu, our initiative is helping build credit files for tens of thousands of renters nationwide,” said Corey Aber, vice president of multifamily mission, policy, and strategy at Freddie Mac. “We have a tremendous opportunity to build on this work and establish an industry standard of on-time rent reporting, which can improve the financial circumstances of even more renters.”

The initiative also is beneficial to property owners by helping to reduce tenant turnover and lower eviction rates.

“Esusu’s credit building program has been a valuable offering to our residents, producing significant results. Since beginning our partnership in 2022, we’ve helped residents establish and improve credit scores throughout our communities,” said Robert Friedman, president of Harbor Group Management Co., which operates 58,000 apartment homes and 5 million square feet of commercial space. “As we seek to provide our properties’ residents with practical resources and tools, we were easily able to scale Esusu’s program across 179 properties within our portfolio, and we intend to implement the program at future properties under management.”