Lenders may have to Legally take Tenants’ Rent Payment History into Account
Lenders may have to legally take tenants’ rent payment history into account when they apply for mortgages, after the matter was raised in Parliament last week.
During Prime Minister’s Questions, Justine Greening, a former cabinet minister, raised the Creditworthiness Assessment Bill, which was read in the House of Commons on Friday.
Greening pointed out that MPs across all parties want to see tenants’ rent payment history contribute towards their credit scores, just as prompt mortgage payments do.
Experian, which issues credit reports, claims that it is now taking into account the rent payment history of over 1.2m private tenants.
It also says that rental data is appearing on tenants’ statutory credit reports, with 79% of tenants who report their rental payments to Experian seeing a noticeable improvement in their credit score.
CreditLadder works with over 2,500 letting agent branches to report verified rent payments to Experian.
The firm’s CEO, Sheraz Dar, says: “As the first and largest of the players offering rent recognition to people who rent, we are proud to play our part in helping responsible tenants gain equal access to affordable credit, both now and increasingly so in the future.”
Lord Bird’s Creditworthiness Assessment Bill was read in the Commons, after it passed through the House of Lords with no amendments.
The bill aims to make it a legal requirement for credit providers to take into account both tenants’ Council Tax and rent payment history.
Rent payment history being included in tenants’ credit scores has long been called for in the lettings industry, with one proptech firm insisting that the change can’t come soon enough.
Do you believe that a tenant’s rent payment history should be included in their credit score, in order to hopefully make it easier for them to obtain mortgage finance?
We will continue to keep you updated with developments to the bill.