LOS ANGELES -

Subprime auto finance companies might be paying even more attention to individuals who are renters because of new research from Enterprise Community Partners, which found 25 percent of these households spend at least half of their monthly income on dwelling commitments.

Furthermore, of the 11 million households that fell into that category, Enterprise Community Partners discovered more than 1.8 million households spend 70 percent or more of their income on rent, leaving little funds left to buy groceries or keep up with vehicle payments. Officials indicated these are households with at least one full-time worker. 

Another element for finance companies to consider is Enterprise Community Partners found these rental trends throughout the U.S. The research showed four states — California, Florida, New York and New Jersey — had 30 percent of its households where individuals needed at least 50 percent of their income to pay rent. Another three states — Louisiana, Pennsylvania and Michigan — came in just 1 or 2 percentage points behind those four previously mentioned states.

Enterprise Community Partners went on to mention some other demographics of individuals who are needing that much of their income to keep up with rent, including:

— 2.2 million senior citizens

— 2.57 million millennials

— 754,000 military veterans

In light of how much rent impacts the family balance sheet — and how performance in this category typically isn’t listed on a credit report — a variety of service providers are crafting tools for finance companies to leverage in order to mitigate risk when booking vehicle installment contracts.

The topic of alternative data was one of the hot topics when the American Financial Services Association hosted its Independents Conference last month.

TransUnion also has a product to monitor alternative data because its recent research showed nearly half of all consumers falsely identified rental (45 percent) and cell phone (47 percent) payments as those that directly affect their credit score.