Credit reference agency Experian has revealed that rent payments will appear on credit reports for the first time from the end of this year.
The move will mean landlords and letting agents credit checking potential tenants will be able to see if they a tenant has consistently paid rent on time or late in the past. This will enable them to make a more informed decision about offering them a tenancy.
As well as reducing their chances of getting a new tenancy, tenants who pay rent late will also find it more difficult to secure a mortgage or credit card in the future.
Those who pay their rent on time should find it easier to access mainstream financial products if their payments are recorded.
Experian has analysed around 24,000 social housing tenants' rent payment records, and reports 93% would benefit if their payment records contributed to their credit ratings.
When set up, the scheme, called Rental Exchange, will be run by Experian and Big Issue Invest, the investment arm of The Big Issue magazine.
The two outfits are working with 160 social housing providers, who look after two million tenants' homes, to enable people in social housing to build a credit history in the same way mortgage holders can.
Experian's managing director of UK customer information, Jonathan Westley, says: "For credit providers to lend responsibly, but also prevent fraud, they need a more complete view of customers' financial commitments and payment history.
"The addition of rental payment data will improve the insight available to make accurate and responsible decisions.
"This initial analysis clearly shows the overwhelmingly positive impact the Rental Exchange will have. The more housing associations that start to share data with us, the more we can help address the problem of financial exclusion in the UK."
.jpg)
.png)
Comments
What a load of nonsense will they include the Government in the report as one of those who regularly pay late housing benefit to the landlord, if not then it is discrimination.
i am a privatehousing tennant, and there would be nothing more better to happen to me than this. it would build my credit history greatly and vastly improve my chances of buying a house in the future. i understand that experian has to start somewhere, but they should have included plans for the private housing sector. surely this amounts to discrimination?
In principle it's a good idea. However a database that only encompasses half of the subject matter is worse than no database.
Experian should therefore extend the scheme somehow to include the huge private rented sector for the scheme to have full impact.
I agree.
Would Experian be interested in collecting information from Private Landlords.
If they can do it with Social Landlords, surely they could do it with us.
I agree with Paul Brown this should be passed on to the private sector aswell.
Social Housing only! I appreciate the logistics, but how nice it would be for the private sector to be given the same powers to improve our rent collections....