‘Do you believe that rental payments should be considered in a credit report?’

‘Do you believe that rental payments should be considered in a credit report?’

"I believe that most people will say that they believe it SHOULD, but I’m looking for somebody who opposes this view – or at least, tends to agree with it but is cautious."

"My own argument would be that a) if it’s being handled by one company (Experian, say), how much of a risk is that in terms of somebody having a good credit score with one agency and a bad one with another? B) who takes responsibility for the admin of this? If landlords, does that represent an opportunity for an unscrupulous individual to act in an undesirable way? C) where does this leave people who haven’t been renting for long?"

Martin Cheek, managing director at SmartSearch says while it would be great if rental payments were considered in a credit report unless landlords are forced by law to share the information, it won’t happen, and only having access to a small proportion of renters’ payment history could do more harm than good.

“In theory, I do think that rental payments should be considered in a credit report, but in practice, it is simply not viable. The challenges faced in sharing this much data on a regular basis are huge.

“For example, we have so many different ways in which people rent, that it is a minefield of information. There is social housing data to collate, lettings agents, private landlords, and my fear is that unless they are forced to share this data, there is no incentive for them to invest any time or money in doing so. And you may get to the point where rental is considered in credit reports, but renters won’t be able to get their landlords to share it.

“So, unless it is universal, and everyone’s rental data is shared, it is worthless. And in fact, if we get to a situation where some people’s rental data is shared by some landlords, but not all, it could actually do more damage than good.

“For example, you have two people both wanting to rent the same home. The first has an impeccable record in making payments, but it is not referenced on their report. The other missed payments with one landlord, which has not been shared but has a good record with a previous landlord, which has been. The person with the worse record could end up getting g the house, who it turns out, is actually a bigger risk.

“The only way this will work is if it is made law and ALL rental data is shared. Currently, landlords have to ensure that any tenant has the right to reside in the UK. This is the law. The only way I think using rental data in credit reports could work in a positive way is to mandate it in the same way.”

Martin Cheek
by Martin Cheek

Managing Director

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