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Sky News: Rent payments to be added to credit reports

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Boost for tenants as rent payments included in credit scores

https://news.sky.com/story/boost-for-tenants-as-rent-payments-included-in-credit-scores-11533321

Records of rental payments are now being included in credit reports, meaning tenants could find it easier to access mortgages and other loans.

Experian, one of the main credit referencing agencies, announced this information now features on the reports of more than 1.2 million tenants across the UK.

It is hoped the details will make it easier for tenants to build a credit history and jump on to the property ladder if lenders can see they have a good reputation of keeping up with payments.

James Jones, head of consumer affairs at Experian, told Sky News: "This is an important step in getting tenants recognition for meeting what in many cases is their biggest financial commitment - monthly rent - on time."

The firm has said more than 150 social housing providers, letting agents and local authorities have reported data about rental payments as part of the "rental exchange" initiative, developed in partnership with Big Issue Invest.

Until now, that information has been invisible. But now, credit checking companies will be able to look at rental payments in the same way they view a homeowner's regular mortgage contributions.

Mr Jones says about 80% of tenants on the scheme should see their credit scores boosted, and will find it easier to access financial services, monthly contracts and loans.

He said: "People who don't have very much credit history can struggle to have even their name and address confirmed.

"For social housing tenants particularly, this will mean more successful ID checks, allowing them to get better deals, helping them get mainstream credit, and moving them away from higher costs."

Being able to provide evidence of credit history is required for taking out a loan, getting a credit card, opening a bank account or trying to get a mortgage, among other services.

At the moment, the main way of boosting your credit score is to take out a loan and keep up with repayments, John Montague, managing director of the Big Issue Group said.

He told Sky News: "It strikes me as barmy that the only way we can improve our position for the day when we need to take out some debt, it to take out some debt.

"We thought there must be a better way. What else can we do to improve people's position in life, to show that they're responsible people?"

Mr Montague said that most people are unaware of the way credit checking works, and highlighted the importance of education on what our data is used for.

He said the scheme is tenant-centred, and that everyone on the program has consented to the scheme.

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So i assume that LA's and LL's will be accountable to the FSA when they missreport on someones credit rating?

Will they have to be registered with the FSA? 

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3 hours ago, rantnrave said:

Records of rental payments are now being included in credit reports, meaning tenants could find it easier to access mortgages and other loans.

Experian, one of the main credit referencing agencies, announced this information now features on the reports of more than 1.2 million tenants across the UK.

It is hoped the details will make it easier for tenants to build a credit history and jump on to the property ladder if lenders can see they have a good reputation of keeping up with payments.

James Jones, head of consumer affairs at Experian, told Sky News: "This is an important step in getting tenants recognition for meeting what in many cases is their biggest financial commitment - monthly rent - on time."

The firm has said more than 150 social housing providers, letting agents and local authorities have reported data about rental payments as part of the "rental exchange" initiative, developed in partnership with Big Issue Invest.

Until now, that information has been invisible. But now, credit checking companies will be able to look at rental payments in the same way they view a homeowner's regular mortgage contributions.

Mr Jones says about 80% of tenants on the scheme should see their credit scores boosted, and will find it easier to access financial services, monthly contracts and loans.

 

2 hours ago, Captain Kirk said:

This should be opt in though if it isn't. With the new GDPR rules, can you now deny companies like Experian from holding data about you? Financial affairs are private after all.

If a person opts out it will destroy their credit score so a bit of a catch 22

 

 

 

 

 

 

 

 

 

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2 hours ago, Captain Kirk said:

This should be opt in though if it isn't. With the new GDPR rules, can you now deny companies like Experian from holding data about you? Financial affairs are private after all.

https://www.experian.co.uk/crain/index.html#question11

Whilst you have complete freedom to contact a CRA with your objection at any time, you should know that under the General Data Protection Regulation, your right to object doesn’t automatically lead to a requirement for processing to stop, or for personal data to be deleted, in all cases. 

Please note that, because of the importance of the credit referencing industry to the UK’s financial system, and the important purposes the personal data is needed for (like supporting responsible lending, and preventing over indebtedness, fraud and money laundering) it will be very rare that the CRAs do not have compelling, overriding grounds to carry on using the personal data following an objection. In many cases, it won’t be appropriate for the CRAs to restrict or to stop processing or delete bureau data, for example, where the result would be to hide a poor credit history that could enable a person or organisation to get credit they otherwise wouldn’t be eligible for.

 

 

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hmmm i wonder how this will work. i have a council house, my money is erratic, but i owe nothing in 3 years, infact i often pay 6 months in advance. however i do have the odd couple of times where ive gone a couple of weeks overdue just because iforget when next payment due as like i said i pay usually in bulk and just wait till i get another arrears letter through to pay again. will this affect my rating just because i do this? seems very harsh if it does. 

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Good idea......rents very often for the same place a lot more than the mortgage, IO, low interest rate for the same place....can afford to pay the rent but not qualified enough to pay the debt.😉

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2 hours ago, regprentice said:

https://www.experian.co.uk/crain/index.html#question11

Whilst you have complete freedom to contact a CRA with your objection at any time, you should know that under the General Data Protection Regulation, your right to object doesn’t automatically lead to a requirement for processing to stop, or for personal data to be deleted, in all cases. 

Please note that, because of the importance of the credit referencing industry to the UK’s financial system, and the important purposes the personal data is needed for (like supporting responsible lending, and preventing over indebtedness, fraud and money laundering) it will be very rare that the CRAs do not have compelling, overriding grounds to carry on using the personal data following an objection. In many cases, it won’t be appropriate for the CRAs to restrict or to stop processing or delete bureau data, for example, where the result would be to hide a poor credit history that could enable a person or organisation to get credit they otherwise wouldn’t be eligible for.

 

 

I don't understand what renting out a property has got to do with credit referencing. You are not borrowing money to rent a place. There is something very wrong and intrusive about having personal data stored about you by a financial industry whose products you are, by choice, not using.

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This is the thin end of the wedge for something similar to China’s social media good citizen score.

Everyone be a good serf or big brother will switch off your ability to participate in the economy.

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10 hours ago, cashinmattress said:

This can only be a good thing. I'm surprised it isn't as it's often required for various personal transactions and contracts.

Wrong. it can VERY easily be a very bad thing. Been discussed on this forum several times in the past.

It fundamentally changes, and creeps, the role of a CREDIT reference agency.

You are not paying back a DEBT, regulated properly by the FSA to your landlord, with sanctions for mis-reporting and guarantees that they will remove mistakes from your CREDIT report.

Your payments to your landlord are nothing to do with the CREDIT reference agencies.

This potentially gives Landlords even more power over the tenants.

3 hours ago, doomed said:

This is the thin end of the wedge for something similar to China’s social media good citizen score.

Everyone be a good serf or big brother will switch off your ability to participate in the economy.

Exactly. What next - the local petrol station starts reporting all my fuel transactions to Experian, and have them recorded too?

 

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9 hours ago, Captain Kirk said:

This should be opt in though if it isn't. With the new GDPR rules, can you now deny companies like Experian from holding data about you? Financial affairs are private after all.

depends who wants to know 😉

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This is excellent news for every slumlord...  Broken boiler, leaking roof?  No problem, the tenant will still be forced into paying their rent like a good little pleb, otherwise they'll never be able to buy or even rent another house for the next six years.

This is monstrous, I really don't understand why anyone who rents has been fooled into thinking it's a good idea.

Mortgages are low-risk secured loans.  We had no problem buying as first-time buyers after renting for lots of years without our rent payments being recorded.  If you want a good credit track-record just get a credit card with a direct debit to pay it in full every month, and use it instead of your debit card.  This will be plenty good enough for any sensible mortgage lender, although they may well start expecting rent payments in your credit records if this does become the norm.

What next?  Recording how often you shower?  As pointed out by others - renting is not borrowing, credit records have only ever been used for loan repayments until now so recording rent payments in a credit report is just creeping mass surveillance.

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21 hours ago, happyguy said:

 

If a person opts out it will destroy their credit score so a bit of a catch 22

 

Credit scores are a nonsense anyway. My Experian credit score, which is normally at the top end of excellent, dropped to the bottom end of fair last year. Out of interest I investigated and the drop was because I moved house and although I kept the same energy supplier, they closed my old account and opened a new one, also I changed mobile and broadband suppliers. The associated credit checks caused the huge drop in my credit rating. Fortunately, it doesn't really matter as I don't borrow money, but annoying none the less as I have always paid my bills on time.

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15 hours ago, mrtickle said:

Wrong. it can VERY easily be a very bad thing. Been discussed on this forum several times in the past.

It fundamentally changes, and creeps, the role of a CREDIT reference agency.

You are not paying back a DEBT, regulated properly by the FSA to your landlord, with sanctions for mis-reporting and guarantees that they will remove mistakes from your CREDIT report.

Your payments to your landlord are nothing to do with the CREDIT reference agencies.

This potentially gives Landlords even more power over the tenants.

Exactly. What next - the local petrol station starts reporting all my fuel transactions to Experian, and have them recorded too?

 

It can yes, but it also potentially builds a good credit file... especially for those with no credit or those off-grid types who are cash only.

Let's see how it pans out before slating it.

You can't hold back big data mrtickle... it's very hungry.

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