The Federal Reserve Board has published research finding that the common practice of classifying anyone without a mortgage in traditional credit bureau data as a renter produces substantial measurement error and materially understates the financial stress of renter households. Using linked data from the 2024 Survey of Household Economics and Decisionmaking and Experian credit records, the paper shows that credit bureau files lack systematic housing tenure information, so proxy renters include many homeowners, especially people who own their homes free and clear. Under the baseline no mortgage proxy, only 42.1 percent of people classified as renters reported paying rent in the survey, while 31.9 percent owned their home free and clear, 15.6 percent owned with a mortgage, and 10.5 percent neither owned nor paid rent. That misclassification makes proxy renters look materially better off than self-reported renters, with lower delinquency rates at 27.6 percent versus 40.7 percent, lower shares using more than 75 percent of their credit card limits at 16.5 percent versus 26.4 percent, fewer credit scores below 620 at 23.3 percent versus 34.2 percent, and a higher share saying they were doing at least okay financially at 68.3 percent versus 55.0 percent. Among alternative proxies built from variables often available in credit files, adults without a mortgage and under age 50 performed best as a broad renter proxy, but still had a 44 percent false positive rate and covered about 69 percent of survey renters, while filters based on low credit scores or recent moves were more suitable only for narrower renter subgroups.
Federal Reserve Board 2026-05-08
United States Federal Reserve Board research finds no mortgage renter proxies in credit bureau data materially misclassify households and understate renter distress
The Federal Reserve Board published research showing that classifying all individuals without a mortgage in credit bureau data as renters generates substantial measurement error and understates renter financial stress. Linked survey and Experian data reveal that many proxy renters are actually homeowners, leading to lower observed delinquency, credit utilization and financial hardship than among self-reported renters, and that alternative proxies based on age, credit scores or recent moves only partially improve identification.