Credit scoring company Experian is launching a scheme that allows private sector tenants the opportunity to use their rent-paying records to strengthen their credit histories.
The initiative, operated with rent management company Credit Ladder, will help people to get similar credit history improvements to those enjoyed by homeowners paying off mortgages.
The scheme is free to participate in, although tenants will have to ‘opt in’ to it proactively. Rental payment information will begin building people’s credit history from the point they sign up, before the data appears on Experian credit reports later this year.
“There are millions of private renters who pay their rent on time each month but don’t get the recognition they deserve on their credit report” says a Credit Ladder spokesman.
Tenants make their regular rental payments via Credit Ladder which passes it on to letting agents or landlords, and it is then fed directly into Experian’s ‘Rental Exchange’ database.
Tenants with a history of little or no credit can then build a more positive credit score and gain access to mainstream, cheaper credit.
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What a good idea! I would be keen to get involved in a scheme that helps the many good tenants we have. Is there a way to also lodge missed rent payments and damage caused by the dodgy tenants onto the scheme? What the PRS lacks is a coordinated database of the poor tenants who consistently and deliberately rip off landlords. Could the 2 objectives be combined within this proposal?
Andrew - Thank you for the feedback. If tenants do fail to meet payments on time then this could effect their credit score. The service does not however cover property damage. This service acts in two ways: by rewarding tenants for their on time rent payments. It also benefits landlords in that it acts as an incentive for on time rent payment.
Yes it would be a good ide but Martin Lewis says that mortgage lenders do not use Experian for credit checks. Unless you or anyone can prove otherwise!
Paul not sure where this has come from! Check here, http://www.moneysavingexpert.com/credit-cards/credit-reference
What a good idea - shame that tenantreferencinguk.com have been doing exactly this, which includes rent arrears and property damages, for the last 7 years!!
Do you know which credit agency reports their data appears on?
Hi Asa, their unique Tenant History reports and Equifax credit reports run parallel to one another; as landlords are fully aware that a person with a good credit score doesn’t automatically make them a good tenant. And more importantly, a person with a bad credit score doesn’t automatically make them a bad tenant either. Read more at: http://www.landlordreferencing.co.uk/blog/climb-up-the-credit-ladder-recycled-new-scheme-from-experian/
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