MPs are today going to debate whether rent payments should be included when calculating credit scores to support tenants wanting to buy a home of their own.
At present, credit rating agencies do not 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.
This follows the success of an online petition, signed by 147,307 people, saying: "paying rent on time [should] be recognised as evidence that mortgage repayments can be met".
The idea already has the backing of the Residential Landlords Association; it surveyed almost 3,000 landlords carried out by the association with 61 per cent of respondents supporting such a move.
Including rent payment would also support landlords, the RLA says, providing them with a more accurate assessment of a prospective tenant’s credit and rent payment history.
Some lettings agencies have already participated in an experiment conducted by global information services company Experian; its Rental Exchange helps private tenants strengthen their credit histories simply by Experian recording their rental payments.
“What many people don’t realise is that you need a good credit rating to access mainstream financial services from bank accounts, credit cards, personal loans and mortgages, to mobile phone and utilities contracts. In the past, building a good credit rating has been easier for homeowners than for tenants, because mortgage payments are factored in” says Experian spokesman Mark Goodfellow.