Building Credit History While Stemming ID Theft

Student housing communities can help college students with the serious matters of building credit history and ID theft protection.

In the popular imagination, college is a time of endless merriment. Four years of hanging out with new friends (perhaps more if you have too much of a good time), cheering on the football team and discovering who you are.

The reality, of course, is that it’s not all fun and games. There’s the pressure to pick a career and get good grades to get into graduate school.

To put it bluntly, the real world is always a lot closer than it may seem.

Some apartment operators are hoping to prepare their college student residents for the real world in a couple of ways: By helping them to build their credit history and protecting them from ID theft, which is emerging as a major problem. When it comes to these issues, which can have a considerable impact on students’ adulthood, it’s never too early to provide assistance, say some in the multifamily industry.

Building Credit History

A strong, positive credit history can create a considerably more comfortable financial life for someone. It makes it easier for a person to obtain car loans, apartment leases, and mortgages—and to do so on favorable financial terms.

Students often leave their college years with little-to-no credit histories. But some student-housing operators have plans to help their residents get a financial leg up with the major credit bureaus without necessarily relying on credit cards.

Alliance Residential, which operates two student-housing communities, is one such operator, as is Greystar, which has 11,000 student beds in its portfolio. In early 2017, both companies began reporting their residents’ payment history to Experian RentBureau, which provides positive rental payment data to the major credit bureaus.

“Put simply, this program offers a classic win-win for our student residents and for us,” says Rachel Davidson, Senior Vice President of Performance for Alliance. “Those who pay their rent on time and in full get the benefit of building their credit history, which can pay dividends for them down the road. At the same time, we have a competitive advantage over nearby communities who don’t help their students in this way.”

While it didn’t focus on college students, the results of a Credit Builders Alliance (CBA) study nonetheless demonstrates the powerful benefits of reporting positive rental payment history to credit bureaus. CBA conducted a pilot program in 2013 and 2014 with eight affordable-housing providers across the country, in which the providers reported the rental payment history of more than 1,250 low-income residents.

According to CBA, all the residents who initially had no credit score at the beginning of the pilot had either a high non-prime or prime score after their rental payment history was considered.

Protecting Against ID Theft

Once a person begins to build their credit, they need to make sure they are doing all they can to protect it as well as their sensitive personal data. Unfortunately, identity theft is probably not first and foremost on the minds of college students, but a bevy of federal statistics suggests it is something they and their parents should be concerned about.

According to recent numbers from the Bureau of Justice Statistics, approximately 17.6 million Americans were identity-theft victims in 2014.

The Federal Trade Commission received more than 490,000 complaints about identity theft from consumers in 2015—a 47 percent increase over the previous year. Fourteen percent of those complaints came from people ages 20 to 29, and another 5 percent stemmed from those 19 and younger.

Reasons that college students may be vulnerable to identity theft are varied, says the National Association of Insurance Commissioners (NAIC). They include not shredding pre-approved credit card offers and bills before disposing of them, shopping online and paying bills on public computers and sharing sensitive information on social media sites like Facebook.

Considering the risks they face, some operators are moving to help their college student residents. In 2017, for example, Greystar plans to offer residents across its entire portfolio—including those in student housing communities—the Fraud Protection Network’s ResidentID Pro solution. The service includes an identity-theft alert system, real-time credit monitoring and lost wallet protection.

“The rapidly-growing rate of identity theft affects the whole population and unfortunately statistics have shown college students may face some of the highest risks,” says Gardner Rees, Senior Managing Director of Advantage Solutions at Greystar. “As a parent of two college students, I am excited that these two programs—reporting positive payment history and ID theft protection— offer students the opportunity to build and protect credit. We look forward to providing these valuable solutions to our residents in 2017.”