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.