People living in private rented accommodation who pay their rent on time could soon get a boost to their credit rating, following the launch of the Rental Exchange service by Experian.
While information about mortgage payments or arrears is included on credit reports, rent payment information currently is not. The new service will record a tenant's payment history, with their permission, strengthening their credit history and potentially helping them qualify for more and lower-cost borrowing.
Experian, a credit-ratings company, says its new service could provide a boost for first-time buyers as lenders will be able to more easily verify their ability to pay out a regular, large sum each month.
Sian Williams, the head of Transact, the national forum for financial inclusion, comments: "This is a very welcome development. The key to its success will be ensuring that consumers are well educated about the service.
"This will include making clear the impact that missing a rental payment could have on their credit rating, especially if it is paid via housing benefit which is often out of tenants' hands."Reuse content