Those living in private rented accommodation and regularly make rental payments on time could potentially receive a boost to their credit rating thanks to a new Rental Exchange feature introduced by Experian.
The new service will keep a record of the payment habits of those living in a rented property which will appear on the individual’s credit score. Tenants that make payments on time will benefits from an improved credit rating which could lead to them qualifying for better rates on lending.
Mortgage payments and arrears have been recorded on credit scores for some time, however rental payments had not been tracked, until now. The new feature from Experian has been welcomed by many who say that it could help first time buyers obtain favourable rates on mortgages as the Rental Exchange will display the individuals’ ability to make regular, large payments, which will make them a better prospect for borrowers.
However the Rental Exchange programme won’t be such good news for those who aren’t good at keeping up with their rentals payments as non rental and late payments could have a negative impact on the tenants credit score. In the future, landlords and letting agents are also likely to use the information to find reliable tenants.
Experian explained that safeguards have been put in place to ensure tenants whose rental payments are made by housing benefits directly will not be penalised for late payments that are out of their control.
