MPs have recently taken part in a debate over whether rent payments should be taken into account when private renters apply for a mortgage to buy their own property.
Rent payments should be used as part of credit scores to help private renters secure a mortgage to buy a home of their own, MPs have said.
The debate took place at Westminster Hall after a petition on the issue attracted 147,307 signatures, which is significantly more than the 100,000 needed to force a debate in parliament.
Credit rating agencies do not currently routinely include rent payment history when calculating credit scores. This means a tenant can find it difficult to apply for a mortgage, even if they have a long history of rent being paid in full and on time.
Some lettings agencies have already participated in an experiment conducted by Experian; its Rental Exchange helps private tenants strengthen their credit ratings simply by Experian recording their rental payments.
“What many people don’t realise is that you need a good credit rating to access mainstream financial services from bank accounts, credit cards, personal loans and mortgages, to mobile phones and utility contracts. In the past, building a good credit rating has been easier for homeowners than for tenants, because mortgage payments are factored in” says Experian spokesman Mark Goodfellow.
Recorded rental payments would also support landlords by providing them with a more accurate assessment of a prospective tenant’s credit and rent payment history.
East Midland Property Management is pleased to announce that they are joining Experian’s Rental Exchange scheme from the 1st January 2018.