Rent payments to be included in Experian data.

[Furbo]

https://www.bbc.co.uk/news/articles/c8jrw8e1w0lo

[Terminator X]

If your score is "low" I assume that you can't get any credit. Must be a right ballache for people like that as I assume they are perhaps also the poorest in society too.

TX.

[geeks]

Could potentially see those who rent get a better score and make it easier for them to get a mortgage? Its also an opt in system so I am not sure how much it changes things on that side. Also dont most rental agencies do a credit check for new tenants anyway?

[Furbo]

geeks said:

Could potentially see those who rent get a better score and make it easier for them to get a mortgage? Its also an opt in system so I am not sure how much it changes things on that side. Also dont most rental agencies do a credit check for new tenants anyway?

Credit vetting tenants is an unreliable means of establishing whether they will pay.

Where a tenant is evicted via the court, with rent arrears, it doesn't always get flagged to the credit reference agencies. So you can take on a tenant that appears alright, but who in fact had to be forcibly evicted owing £10k.

Asking a tenant if they are prepared to opt in might be a good filter!

If a tenant is prepared to opt in, I can see that being good for the tenant as much as anyone else. Build up a track record for either future rentals or buying.

[POIDH]

As an ex-landlord, I think this is a Good Thing.

However, the notion of 'credit scoring' is not for you the consumer - it is for the benefit of banks. Part of the reason I do not have a perfect credit score is that I don't have enough borrowed - apparently lenders like a wee bit of debt (I bet they do...) so that you can 'prove you can manage debt responsibly'. And of course the same credit score ignores my savings, which are significant.

[Crumpet]

Furbo said:

Credit vetting tenants is an unreliable means of establishing whether they will pay.

Where a tenant is evicted via the court, with rent arrears, it doesn't always get flagged to the credit reference agencies. So you can take on a tenant that appears alright, but who in fact had to be forcibly evicted owing £10k.

Asking a tenant if they are prepared to opt in might be a good filter!

If a tenant is prepared to opt in, I can see that being good for the tenant as much as anyone else. Build up a track record for either future rentals or buying.

My Dad’s just had that issue with a tenant who’d not paid the rent for six months. Council told him to stay put until evicted; finally got evicted but to reclaim any missing rent or have any record placed on the bd’s history would’ve cost my Dad further ££££s. There will be many renters out there who are total liabilities and no one will know until it’s too late.

[coxy0072004]

POIDH said:

As an ex-landlord, I think this is a Good Thing.

However, the notion of 'credit scoring' is not for you the consumer - it is for the benefit of banks. Part of the reason I do not have a perfect credit score is that I don't have enough borrowed - apparently lenders like a wee bit of debt (I bet they do...) so that you can 'prove you can manage debt responsibly'. And of course the same credit score ignores my savings, which are significant.

Exactly this, I never have a perfect credit file, but mainly because I don't borrow any money, in the main because I'm a saver and sensible with my earnings.

[LooneyTunes]

Furbo said:

geeks said:

Could potentially see those who rent get a better score and make it easier for them to get a mortgage? Its also an opt in system so I am not sure how much it changes things on that side. Also dont most rental agencies do a credit check for new tenants anyway?

Credit vetting tenants is an unreliable means of establishing whether they will pay.

Where a tenant is evicted via the court, with rent arrears, it doesn't always get flagged to the credit reference agencies. So you can take on a tenant that appears alright, but who in fact had to be forcibly evicted owing £10k.

Asking a tenant if they are prepared to opt in might be a good filter!

If a tenant is prepared to opt in, I can see that being good for the tenant as much as anyone else. Build up a track record for either future rentals or buying.

It’s something I’m very much in favour of, and we do upfront credit checks, but can pretty much guarantee reporting won’t be implemented in the way it would need to be in order to be effective.

The biggest challenge with tenants is that circumstances change. We don’t have a high long-term default or eviction rate but at down to look at what has caused/contributed to tenants payment issues in the past.

Initial payment issues sometimes occur, almost always with newly separated singles. Suspect these flow from one of two things: tenants either over-extending or wanting to spend money on furniture etc and/or not having got to grips with budgeting solo/on lower household income.

Occasionally see temporary payment issues where people change jobs.

What was interesting were the circumstances in those cases where repossession was needed. It’s not a large sample size but every single one of those involved some combination of drug, alcohol, or gambling issue that arose at least a year into a tenancy they’d previously been up to date with. In a significant percentage of cases a police stop —> drink/drug driving charge —> loss of license —> loss of job. Every single one of those also saw council tax, utility, other arrears stack up (which would eventually end up on credit files).

(To address the obvious question “how do you know?”, the answer is simple: bank statements provided when sorting payment plans and/or paperwork left behind by tenants,)

Rent arrears being reported on credit files wouldn’t necessarily have prevented any of those defaults but would be something you’d want to know about before considering them as tenants on a new property.

Perhaps the most sobering aspect of looking into things was seeing how quickly (and how much) things can snowball from a bad decision to get behind the wheel.