From Recession to Boom Times

Renter Profile Shifts

CHICAGO, IL--(Marketwired - December 07, 2016) - Despite steep increases in rental prices, renters are less financially constrained today than they were just after the last recession, according to a new TransUnion (NYSE: TRU) study. The study confirmed that renters at the mid-point of 2016 were lower risk and more credit active than renters were in 2010.

TransUnion analyzed the credit behavior of 775,000 renters who moved in Q2 2009, and 631,000 renters who moved in Q2 2015, over the 12-month period post-move. TransUnion found that 38.6% of the 2015 renters had a prime or better credit score (VantageScore® 3.0 score of 660 or above) in 2015, compared to 26.2% of the 2009 cohort of renters.

"Comparing renters from the immediate post-recession period to renters of today highlighted an interesting dynamic," said Ezra Becker, senior vice president of research and consulting for TransUnion. "While renters in 2009 were facing a difficult economic environment, renters today also face challenges because of rising rental prices. Yet significant economic changes have occurred between 2009 and 2016, with a net benefit to renters. Today's renters are generally lower risk and more credit active in the 12 months following their move, taking on more auto loans and credit cards than previous renter cohorts."

Credit Score Distribution of Renters at Move-In Date in 2009 and 2015

VantageScore3.0®	2009	2015
780 and above	5.3%	7.5%
721 - 780	10.3%	15.1%
661 - 720	10.6%	16.0%
601 - 660	13.0%	16.7%
300 - 600	48.8%	32.4%

Between 2009 and 2016, the percentage of renters who opened a new card in the 12 months after move-in doubled. The study found that 28.7% of the 2015 renter cohort opened a new credit card by mid-2016, while only 12.4% of the 2009 cohort had a new credit card account by mid-year 2010. Auto loan originations also rose for renters by mid-year 2016, with 17.2% opening an auto loan within 12 months after move-in, compared to 9% of 2009 renters.