Rental payments to impact credit rating
Rental payments are set to become a part of the Experian credit check, rman.co.uk reports.
Experian, the UK’s most popular credit score checker, has announced it is to liaise with letting agents to find out tenant’s rental payments and factor them into its calculations.
The information will include how much was paid in rent, as well as any missed payments and the length of time rent was paid.
It is thought the new ’Rental Exchange’ will give landlords a clearer indication of whether a prospective tenant can pay rent; as well as giving mortgage lenders a greater idea of how safe a loan would be with certain individuals and therefore how much it would be best to lend.
Anyone with rent arrears should then find it easier to secure a mortgage, with potential for the total offered to be raised. The opposite would be true for those who miss rental payments. Any disputed claims will not be counted against a tenant, however, until an agreement has been found between all parties.
Landlords and letting agents have welcomed the scheme, although it is thought it could be 12 months before real results are shown as Experian will use that time to sign agents up to the service.
Speaking to guardian.co.uk about the new scheme, the managing director of credit services at Experian UK and Ireland, Paul Cescovi, explained: “With several million people living in privately rented accommodation, a significant percentage of the population could be missing out on mainstream, low-cost credit because lenders do not currently have a comprehensive picture of their financial track record.
“The Rental Exchange will strengthen people’s credit histories, helping them to access a wider range of credit deals.”