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TODAY'S OTHER NEWS

Parliament to debate rent payments being added to tenant’s credit score

Private tenants who pay their rent on time could soon see their credit rating boosted in order to make it easier for them to gain a foot on the housing ladder, after it was announced that parliament will debate the idea of taking rent payments into account when people apply for a mortgage.

The debate will take place after a petition on the issue raised by Plymouth construction worker Jamie Pogson attracted 147,307 signatures, which is significantly more than the 100,000 needed to force a debate in parliament.

Credit rating agencies do not currently routinely include rent payment history when calculating credit scores. This means a tenant can find it difficult to access a mortgage, even if they have a long history of rent being paid in full and on time.

But a recent survey of almost 3,000 buy-to-let landlords carried out by the Residential Landlords Association (RLA) found that 61% of landlords would support rental payments being added to tenants’ credit histories in the same way mortgage payments are.

The RLA believes that including rent payment in this way would also make it easier for landlords to make a more accurate assessment of a prospective tenant’s credit and rent payment history.

The RLA’s chairman, Alan Ward, commented: “With many tenants wanting to buy a house of their own, it is absurd rent payment is not routinely included when undertaking credit checks for mortgage applications.

“Moving to such a scheme would help not just tenants, but also landlords by giving them a clearer sense of whether a prospective tenant has historically paid their rent in full and on time.”

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  • Asa Bentley

    CreditLadder supports this debate. We set out to help tenants to report their rental payments to Experian. Having processed close to £8m in rents to date we work directly with tenants, landlords and agents to deliver a safe and secure reporting platform. We're staying close to developments and the outcome of this debate as we believe it's time for a widespread change to help first-time buyers.

  • Mike Georgeson

    This is great news for tenants and landlords. RentalStep already reports rental payments to Experian which not only boost a tenant's credit score but also show landlords their payment history. Our TenantPassport can be used to verify rent payments to mortgage providers which will greatly help a tenant with their mortgage application. I'm looking forward to playing a part in this debate.

  • Faisal Abdallah

    Will they check the regular transactions into landlords' account? What if it's cash payment as most rogue landlords prefer to get paid? What if tenancy agreement and payments are made up just to boost the credit score?

    Mike Georgeson

    Hi Faisal,
    Great questions. You're right, someone could potentially make up a Tenancy Agreement and payments just to boost their credit score but there are checks in place to try to ensure this doesn't happen.

    At RentalStep.co.uk, we have to make sure that the data we supply to our rental exchange partner, Experian, is accurate so we ID check all our landlords and carry out land registry checks.

    Landlords can verify payments manually through email or text which only takes about 20 seconds, or we can automatically confirm payment when a Direct Debit is set up which is free. Cash payments can also be verified manually.

    Hope this helps.

     
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