If you have a car on finance and miss a payment, the repercussions are easily identifiable and detrimental to your credit score. However if you make on time payments, you simply boost your standing to lenders as you appear more creditworthy and build a credit history over months or years. This helps you get future loans at better rates because you had a financial obligation or commitment to pay a certain amount over a certain time frame which you adhered to.
The same goes for your mortgage, credit card, mobile phone contract or utilities.
So why not for your rent?
Well, some might argue that at first rent does not appear as a financial commitment. But with over £14bn banked by landlords in rental income and over 4 million tenants. Surely somebody should be keeping count of who is being naughty by missing their rent payments and who deserves a credit boost for making said rent payments on time.
Rent payment is after all a financial commitment from the tenant to the landlord in similar fashion in which your phone contract is a commitment between you and your phone data provider. It is also the biggest expense most people will have per month, so why shouldn't tenants be rewarded for keeping this commitment for months and months at a time.
We think you should! As a tenant you should get rewarded. Your credit score should reflect your payment performance with your landlord.
So just why has it taken so long for Rent reporting to hit the mainstream?
Well, it’s really two things:
- Lack of technology
- Poor quality of data/data verification
Technology has always lagged behind but now there is Open banking, oh wait Open banking is just a regulated tag given to technology that always existed in the form of screen scraping. Open banking however will allow more trust from end users, the tenants and allow more innovation in a space where technology can really solve pesky problems such as rent reporting.
Poor data quality has also been an issue. The credit bureaus have not had any idea who to trust as a reliable source for data. The tenant? The landlord? The estate agent?
The issue of trust has kind of vanished slowly due to technology allowing for audits and accurate reporting to be in place.
So what does the future hold?
Rent reporting is here and if you are just about to get into university and rent your first accommodation from the university. You should consider it. Rentroster by Huuti will be knocking at your door asking you to report your rent and begin to build your credit score.
This will help you avoid the catch 22 scenarios many graduates find themselves in. They have got their degree and now it's time to go buy their first car on finance or rent their first property outside of Uni and they cant pas a simple credit check as their credit histories are non existent or they have thin credit files. Don't be this person, report your rental payment history now!
Law is being discussed to make this a legal right of every tenant.We hope this comes in to fruition so younger generations have a fairer playground to start from.