A new rent collection service that offers landlords the same power as large financial institutions to incentivise on-time payments from their tenants has been launched by TheHouseShop.com in partnership with Experian.
Rent arrears can cause landlords major financial problems, with TheHouseShop reporting that rent arrears cost landlords in this country more than £900m annually.
The property marketplace provider claims that part of the problem for landlords is that rent payments often fall behind other outgoings, such as utility bills or credit card payments, in the list of tenant’s financial priorities, mainly because unlike most other regular monthly payments, rental payments are not reflected on a tenant’s credit history.
Until recently, private landlords have been unable to do anything to address this imbalance in financial priorities. But with the increasing importance of credit scores in modern financial life, TheHouseShop hope that its new RentScore service will help change that.
RentScore, which costs from £9.99 per month, sets up Direct Debit payments from tenants, much like any other rent collection service, but crucially it also registers rental payment data with Experian’s Rental Exchange, reflecting late or missed payments on the tenant’s credit reports.
The fact that a tenant’s rent payment can now impact their credit score, in the same way as other significant outgoings, should help encourage more tenants to make rent a top priority.
Nick Marr, co-founder of TheHouseShop, said: “All landlords worry about their rental income, especially if they have a buy-to-let mortgage that needs paying every month regardless of whether their tenant has paid or not! Dealing with the hassle of rent collection and chasing payments can be a major cause of stress for a landlord, so anything we could do to minimise that pressure was going to be popular.”
“Our partnership with Experian and the Rental Exchange has allowed us to offer a smart rent collection service that goes above and beyond to help minimise the risk of late or missed payments. From the tenant’s perspective, RentScore acts as both the carrot and the stick – giving them the chance to improve their credit reports if they pay on time, but adding the risk of negatively impacting their credit file if they don’t. So, it really is a win-win for both parties.”
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