India’s residential rental market is undergoing a transformation. As per a recent report, rental rates in have risen by 4.8% QoQ in the second quarter of 2025 and has also witnessed a striking 29.6% YoY increase. However, it must be noted that this growth isn’t limited to rents alone — the sector has also witnessed a 3% QoQ increase in demand and supply at the same time.
Such a growth curve is the sign of overarching trends. With youth unemployment rates reducing from 17.8% in 2017-18 to 10.2% in 2023-24, more people are moving to urban areas. However, due to the rapid increase in property prices, many families and young professionals have shifted their residential preferences away from home ownership to rental housing, primarily in metro cities. Now, most millennials and Gen Z professionals are deliberately choosing renting over ownership, not only for a temporary period but as a long-term routine choice. As a result, these individuals are driving the nation’s rental housing boom.
Approximately 30% of India lives on rent, which forms the biggest monthly recurring expense for tenants, especially in cities like Bengaluru, Pune, Gurugram, and Mumbai. Despite that, this expense has been largely overlooked as just an expense with tenants getting little to no financial benefits. What makes things worse is that such a lumpsum monthly expense has also been kept out of the financial ecosystem unlike EMIs or credit card repayments. As a result, tenants continue to remain invisible to credit institutions, irrespective of their timely rent payment patterns.
However, all that is poised for a change with a new wave of financial innovation which are starting to address the gap in the rental ecosystem. Through Rent Credit Score platforms, tenants can now attain concrete credit benefits purely by reporting their monthly rent payments. These platforms also facilitate a smooth transition of rental payment data to banks and credit bureaus, allowing tenants to enhance or build their credit profiles. This not just legitimises the financial behaviour of renters but also leads to a more inclusive credit scoring system that reflects the realities of contemporary living.
Another significant development in personal finance is the emergence of rent credit score tools and platforms. For the first time in history, renters now have the ability to convert their ordinary expense into a source of financial wealth. Just as the monthly payments towards an EMI help a borrower build better creditworthiness, monthly rent payments now become a positive indication of the financial discipline of renters.
Furthermore, these platforms empower tenants with more access to financial opportunities. A stronger credit score charts pathways to an array of benefits for them. This eventually translates into lower interest rates on loans, higher chances of approval for credit cards, faster processing of financial products and even home loans. For young professionals, aligning their long-term financial goals, whether it is about starting a business or buying a home, has now become more feasible.
The rewards of building credit scores extend even further. These new-age platforms enable tenants to establish a rental identity of their own, which serves as a type of ‘rental passport’ in the digital realm. This provides a way to authenticate profiles that landlords can feel comfortable verifying. For tenants, the benefits extend to less documentation, decreased paperwork, and even possible reductions in rent as landlords feel more secure renting to verified tenants.
Additionally with the democratisation of access to financial services. In the conventional credit system, individuals without loans or credit cards struggled to build a score. This left out a major segment of the population, especially first-time renters and young earners, from availing formal credit. Now with rent reporting, financial inclusion has substantially expanded. Renters can establish a credit footprint quite early in their careers just through rent payments. This also lays the basis for healthier financial habits at an early age, as individuals can assess their credit standing and manage their commitments well.
The shift entails more than just a technological advancement to financial reporting; it’s a necessary mindset change. It repositions tenants as active financial participants. With the help of right tools, they can now convert rent from an expense into an investment for their future. In sum, as rent attains recognition within the credit ecosystem, tenants, especially the young professionals, are no longer invisible to the financial system. What was formerly a silent expense has now become a stepping stone to financial growth. Finally, the rental credit void is being filled through innovation, inclusion, and the promise of a more equitable future.
