Rent Payments To Go On Credit Report

[SarahBell]

This has been mentioned before - but is not up and running yet and would require a change in tenancy agreement I believe before landlords can implement it.

http://www.moneysavingexpert.com/news/mortgages/2013/11/rent-payments-on-credit-files-should-help-social-housing-tenants

11 November 2013

MoneySavingExpert.com understands rent payments will begin to appear on credit records next year, covering those in both private and social accommodation.

When set up, the scheme, called Rental Exchange, will be run by Experian and Big Issue Invest, the investment arm of The Big Issue magazine.

Experian says its research found:

20% of social housing tenants have credit scores just below a typical mainstream lender's pass mark, which limits their opportunity to access cheap credit. If rental payment data was added to their credit score, up to a million people could benefit.

Up to two-thirds of social housing tenants who can't get current accounts or other basic services because they fail ID checks could pass them if their rent payments are recorded.

Really? There's no other way.

[Monkey]

More debt for the masses? Hahahahahah

[Sour Mash]

The road to debt serfdom for the masses is being well and truly paved.

Just keep your attention focussed on social media, celebrities, prolefeed TV and football and it'll all be OK.

[spyguy]

We know where this is going.

You no longer just have rent for the place....you will have a price related to you. Risk based pricing.

The way it will happen will most likely be the nicest, cheapest places won't be available to you because of your poor credit record.

How do you get homed then? Well, no doubt some Rachman will accept poor credit records...at a price. But of course, the default rate will be high too. But they don't care as long as they clear a profit on average.

Sort of already in place.

Most social tenants are there because cannot stump up 1 months deposit, up front, in cash.

[Wurzel Of Highbridge]

And if you have a low credit score you are then refused accommodation or your rent is increased.

Get into trouble at Wonga, rent goes up 10%.

No credit score, that's another 10%.

[R K]

One way or another the market is being set up for the insurance companies to move into the domestic rental sector. This may/not be part of that, but that's where we're headed.

Ought to be a good thing, but like everything else will end up as a City based rent extraction (literally in this case) cartel.

[billybong]

[quote

]When set up, the scheme, called Rental Exchange, will be run by Experian and Big Issue Invest, the investment arm of The Big Issue magazine.

and there's people thinking it's just to help out a few very poor people to make a few quid.

Now it's to help lenders limit their risks and help poor people into debt via the Big Issue Rental Exchange. No problem - the borrowers will just have to sell more Issues.

Innovative - watch out Germany 2030 is coming.

Edited December 29, 2013 by billybong

[rollover]

20% of social housing tenants have credit scores just below a typical mainstream lender's pass mark, which limits their opportunity to access cheap credit. If rental payment data was added to their credit score, up to a million people could benefit.

Really? There's no other way.

Time to lower credit rating for people with a poor credit history to be able to get a standard mortgage at a lower rate. What could possibly get wrong?

[billybong]

Doesn't it mean for council tenants that once again it's the taxpayer that's bankrolling the credit/credit score as housing benefit/rent payments are paid directly to the landlord. So council tenants can't fail to get a plus on the credit score unless there's a computer failure or the landlord makes a mistake.

So in that case nothing is changing (it doesn't improve those borrowers real creditworthiness one bit and the plus on the credit score is through no effort by the tenant) except that a huge number of tenants are going to be able to borrow more money merely by a manipulation of the current system of credit scoring.

Edited December 29, 2013 by billybong

[@contradevian]

Sort of already in place.

Most social tenants are there because cannot stump up 1 months deposit, up front, in cash.

No need because carpets, flooring, furnishings and appliances are not (usually) part of a social tenancy contract.

Also most credit applications already distinguish between unfurnished and furnished rentals, the latter being the least credit worthy.

Social tenants may not be able to 'stump up 1 months deposit' as you put it (which would almost certainly be stolen in private rented) but at least usually own the bed they sleep in and can decide the colour of the walls.

Edited December 29, 2013 by aSecureTenant

[Bloo Loo]

This has been mentioned before - but is not up and running yet and would require a change in tenancy agreement I believe before landlords can implement it.

http://www.moneysavi...housing-tenants

11 November 2013

MoneySavingExpert.com understands rent payments will begin to appear on credit records next year, covering those in both private and social accommodation.

snip

How will these just appear on the Experian records?...After a court order?...after a days lateness, and just who is going to report it?

[@contradevian]

How will these just appear on the Experian records?...After a court order?...after a days lateness, and just who is going to report it?

I shall be contacting my ALMO next week to find out

Actually having just read the OP article its just an idea being mooted by Experian (as a 'benefit' to renters of course - you'll get access to cheaper credit, but really just an excuse to store even more information about you).

Edited December 29, 2013 by aSecureTenant

[SarahBell]

I shall be contacting my ALMO next week to find out

Actually having just read the OP article its just an idea being mooted by Experian (as a 'benefit' to renters of course - you'll get access to cheaper credit, but really just an excuse to store even more information about you).

It's been mooted for a while but

http://www.propertytribes.com/experian-rental-exchange-t-9276.html

"With direct payment becoming uncommon under universal credit, this data will have lots of value…. "

[Bloo Loo]

Yes. Every single regular monthly payment is recorded on all your forms of credit. Includes utilities too.

Loans, credit cards, mobiles etc etc

So to exclude rent is a bit of an anomaly I suppose. Except you are usually paying up front.

Indeed, its the LANDLORD who gets the credit..the tenant pays up front and with 6 weeks deposit to boot too.

There is no credit given to the tenant...

[Squeeky]

Yes. Every single regular monthly payment is recorded on all your forms of credit. Includes utilities too.

Loans, credit cards, mobiles etc etc

So to exclude rent is a bit of an anomaly I suppose. Except you are usually paying up front.

I think this is the anomaly to be honest. Car rental doesn't appear on your credit report, equipment hire (from tennis rackets through to heavy plant), hotel room hire, boat hire etc... none of this goes on your credit record.

Unless you are borrowing money be it via leasing or a straight forward loan or equivalent (consuming gas, electricity or telco, before you've paid for it), it will not appear on your credit file. It will be the anomaly to include rent on a credit file, not the other way around.

Personally I think this is a bad move. The credit agencies collect enough information already that can impact quite severely on individuals and it isn't always correct. If they gave you as the individual the data concerns, free access to the data (and made querying entries easier). I may find the whole thing less abhorrent.

[Hold Fast]

Indeed, its the LANDLORD who gets the credit..the tenant pays up front and with 6 weeks deposit to boot too.

There is no credit given to the tenant...

Agreed, I've long failed to see why tenants should be credit checked. Surely just a needless charade conducted by agents because (i) they can profit from it and (ii) it makes landlords think the agent is doing something they can't, i.e fake added value.

Put it this way, if it involves a credit check or is recorded on the credit record then it should have to be subject to a consumer credit agreement (and regulated as such).

Edited December 29, 2013 by Hold Fast

[koala_bear]

SO when does the landlord credit report come into being, the one that shows their BTL mortgage payments, insurance details, safety checks etc ... oh sorry silly me this sort of stuff only applies to tenants.

HMRC will get the data off Experian and use it as an additional data source for which properties are rented out to pursue landlords who don't pay all their taxes.

[19 year mortgage 8itch]

Agreed, I've long failed to see why tenants should be credit checked. Surely just a needless charade conducted by agents because (i) they can profit from it and (ii) it makes landlords think the agent is doing something they can't, i.e fake added value.

Put it this way, if it involves a credit check or is recorded on the credit record then it should have to be subject to a consumer credit agreement (and regulated as such).

Can you imagine a 14 day cooling off period for tenants?

Your house is cold, draughty, damp and the neighbours are *****. i quit, contract cancelled.

I wish.

[Squeeky]

Can you imagine a 14 day cooling off period for tenants?

Your house is cold, draughty, damp and the neighbours are *****. i quit, contract cancelled.

I wish.

If you were prepared to move every 14 days when you are in a bit of a bind. That could be really handy.

[19 year mortgage 8itch]

If you were prepared to move every 14 days when you are in a bit of a bind. That could be really handy.

If you had the right then you could prepare yourself to use it.

[Hold Fast]

Can you imagine a 14 day cooling off period for tenants?

Your house is cold, draughty, damp and the neighbours are *****. i quit, contract cancelled.

I wish.

I can remember a couple rentals that I would have given the keys back after a few weeks! I see your point though.

What I'm trying (and failing) to illustrate is that the whole credit check thing and putting rent payments on credit reports are both unnecessary. You're not having credit so people like experian need to foxtrot-oscar and keep their noses out.

That's IMHO, naturally .

Edited December 29, 2013 by Hold Fast

[mrtickle]

Yes. Every single regular monthly payment is recorded on all your forms of credit. Includes utilities too.

Loans, credit cards, mobiles etc etc

Not utilities. My gas, electricity, water, internet and landline telephone payments have NEVER EVER been recorded on any of my credit reports in my entire life. From all 3 agencies (Experian, Equifax, Call Credit)

Only bank accounts, loans, credit cards. Bizarrely my mobile phone used to be, but I don't see why since I wasn't borrowing any money from them other than having bills to pay each month, but that is no different from having bills from gas, electricity, water, internet, TV licence and all manner of other monthly bills I paid. I presume it was because they considered that I "borrowed" the money from them to pay for the handset initially, which they got back (and a lot more) from my bills during the contract.

But mobile phones are the exception, a luxury and not what I'd consider a house "utility" really.

Edited December 29, 2013 by mrtickle

[Hold Fast]

Also, does this (rent payments on credit report) call time on the practice of witholding the last month's rent in lieu of the deposit?

It's not something I've ever done myself but wouldn't be surprised if it was a fairly common course of action. Particularly after someone has been shafted for their deposit a couple times.

[mrtickle]

Also, does this (rent payments on credit report) call time on the practice of witholding the last month's rent in lieu of the deposit?

It's not something I've ever done myself but wouldn't be surprised if it was a fairly common course of action. Particularly after someone has been shafted for their deposit a couple times.

Almost certainly. That would be flagged as a missed payment and not only damage your rating, but be visible to every subsequent future landlord for the next 7 years!

[The Ayatollah Buggeri]

But mobile phones are the exception, a luxury and not what I'd consider a house "utility" really.

I get the impression that increasingly, they're being used as the only phone by people whose poor credit history, or inability or disinclination to pay the £150 connection fee, makes them unable to get a landline. Hence the reason, I suspect, that many banks, utility providers and other businesses will refuse to deal with you if you can't or won't give them a landline number.

The university I used to work for attempted to impose a rule to the effect that all students must have a landline at their term-time address, in an attempt to reduce their phone costs. They also blocked outgoing calls to mobile numbers from university office phones for a while: as with international calls, you had to have your line manager authorise each individual call. It eventually turned out to be more hassle than the saving was worth (mainly because students gave their parents' phone numbers, making it virtually impossible to contact them, because their parents would simply reply with "call this mobile number") and they relented. But that's just another illustration of the fact that if you're only willing to give a service vendor an 07... number, you're generally treated with suspicion.

We don't have this issue in the US, because mobile numbers have the same area codes as landlines - you can't tell just from looking at a phone number whether it's a mobile or a landline. Mobile users pay to receive calls as well as originate them (although unlimited minutes plans are increasingly making this irrelevant), and so if someone calls a mobile from a landline, the cost of the call is effectively split 50/50 between the two parties.