About Rent-to-Own - RTO: Rent-to-Own Changing With the Times

Ownership is just an option
The emphasis is on renting, not necessarily owning. While ownership is an option, industry research and statistics have consistently shown that over the past 20 years, three out of four rent-to-own customers—75 percent—return their products within four months. The choice is the consumer’s.

Rent-to-own is growing
Rent-to-own prices are being lowered all across the country and rent-to-own’s image has improved as a result. The quality, variety and accessibility to trusted name brands in rent-to-own stores have also helped to boost customer counts according to a recent rent-to-own industry survey.

Rent-to-own companies are lowering cash prices, creating new customers
Many rent-to-own companies are offering competitive cash prices and lower payment terms, as well as early pay-off options. Rent-to-own is becoming more competitive with retail, yet is debt-free and does not negatively affect a consumer’s credit. Competition, market innovation and general industry acceptance are lowering rent-to-own prices across the nation and with rent-to-own there is never an obligation and the consumer is never in debt. The lowering of cash prices is creating a new customer for rent-to-own and paving the way for rent-to-own to fill an even broader consumer niche.

Credit scoring using rent-to-own payment history
The inadequacy of the current credit scoring system penalizes an estimated 50 million Americans—making it virtually impossible for those potential consumers to achieve the dream of home ownership. Consequently, brokers and lenders around the country are beginning to use alternative scoring systems that factor in scoring reports from national bureaus, then incorporates other non-traditional information collected by CredCo, such as regular child-care, telephone, utility and rent-to-own payments. Leaders who are trying to help these 50 million Americans become credit-worthy do not understand why traditional scoring systems penalize debt-averse consumers “rather than being rewarded for their consistency in meeting financial commitments, even if it is in cash.” Rent-to-own dealers have been helping consumers establish or re-establish credit for years. The recent inclusion into a national scoring system such as CredCo confirms rent-to-own’s value to the U.S. economy, especially with its ability to help millions of Americans achieve their dream of home ownership.