MSE News: Rent payments to go on your credit file

N79

In the hope that Experian really are taking on board the comments from this thread here goes.

You really have to take into account that there are a number of cases where it is both entirely reasonably and lawful for a T to withhold rental payments. The bodies which have said that this is both entirely reasonable and lawful are the High Court and Parliament itself!

Whatever you do, you must take this into account - that a late rental payment may, in fact, be an entirely reasonable and lawful act by the T. It would be outrageous for you to "black mark" a T for exercising their statutory rights (in the case of LL and T Act 1987 S48). Therefore whatever reporting process you have in place must be able to seek both sides of the story before disadvantaging Ts.

Of course doing this will be expensive and onerous - which is why no one has attempted this before.

Experian_company_representative

I've posted a comment on another thread tonight specifically on the issue of financial links and rent data. This is what I said:

Let me address the issue of financial links, which is clearly causing some concern.

One of the advantages of making a very early announcement on our Rental Exchange project was to enable us to listen to people's views - both positive and negative - and to take these into consideration at a time when we are still shaping the service. This particularly applies to some of the finer detail on how this data-sharing initiative will work in practice.

When we announced the initiative last week we didn't mention financial links. However, when pressed for more detail by the MSE team we did confirm that financial relationships created by joint tenancy agreements on the Rental Exchange were likely to link up people's credit reports.

It is now clear, particularly from monitoring comments in this forum, that this would be inappropriate in many cases, due to the nature of many joint tenancy arrangements.

As a result, it is not now our intention create financial links on credit reports from rental data.

Importantly - and as is always the case with the sharing and processing of personal data - consent/notification will be a prerequisite of the scheme. Agreements will make it very clear what data will be shared, with whom and how it will be used.

As I think I said in an earlier post on here, we are convinced that this service will bring very positive benefits for consumers, landlords and, of course, lenders. We are determined to get this right and will continue to listen to people's views and concerns as the service develops.

James Jones

JimmyTheWig

Good news about the credit file linking. Well done MSEers in presenting the arguments.

But...

Experian_company_representative wrote: »

Importantly - and as is always the case with the sharing and processing of personal data - consent/notification will be a prerequisite of the scheme. Agreements will make it very clear what data will be shared, with whom and how it will be used.

As has been said before, requiring consent becomes irrelevant if you need to give that consent to be able to rent somewhere.
Very few will take the line that they don't want to consent to this and so will become homeless. In effect, then, if the scheme is successful then consent will become necessary.

jjlandlord

JimmyTheWig wrote: »

Very few will take the line that they don't want to consent to this and so will become homeless. In effect, then, if the scheme is successful then consent will become necessary.

If the scheme if successful, it will be impossible to rent through a (large) letting agent without giving consent.
Obviously any "don't worry you will have to give consent" assumes that people have a choice...

Again, considering how many, many letting agents behave, I fear it might end up as a nasty can of worms for tenants.

HAMISH_MCTAVISH

I do have some concerns that the financial linking of flatmates on other matters is a step too far.

However other than that it is a very good idea.

It will help ensure rents are paid on time (and if you're even a day late then you are indeed using an unauthorised credit facility from your landlord).

It will ensure tenants realise that in the vast majority of cases they are jointly and severally liable for rent, so they'll take more care in choosing flatmates and reduce losses for landlords. Losses which are reflected in higher rents eventually for everyone else as experienced landlords make provisions for such things.

It will allow tenants to build a better credit history and establish a tenants ability to pay regular monthly outgoings for housing that the banks will eventually start noticing.

Rents are already higher than a mortgage payment in many/most places anyway, so current deposit requirements are absurd.

And tenants who look after their financial affairs will have access to a better choice of housing than tenants who don't. Ultimately, they'll be rewarded for paying rent on time.

All good things...

So a worthwhile direction to be pursuing and it should be applauded overall.

tbs624

HAMISH_MCTAVISH wrote: »

However other than that it is a very good idea.

...in your personal opinion, which is not shared by everyone else.

HAMISH_MCTAVISH wrote: »

It will help ensure rents are paid on time (and if you're even a day late then you are indeed using an unauthorised credit facility from your landlord).

I don't think that it will. There are some Ts who will pay late regardless.

HAMISH_MCTAVISH wrote: »

It will ensure tenants realise that in the vast majority of cases they are jointly and severally liable for rent, so they'll take more care in choosing flatmates and reduce losses for landlords. Losses which are reflected in higher rents eventually for everyone else as experienced landlords make provisions for such things.

In the vast majority of cases Ts already understand the reality of signing up to a J&SL contract but, as others have highlighted elsewhere, Ts often have little real choice over exactly who they end up sharing th eproperty with.

For example, Unis who cannot provide halls places for all new students ( especially those coming in through clearing) will point students towards "match up" accomodation sessions in which 1st year students sign up to a shared property with people they have never met before

HAMISH_MCTAVISH wrote: »

It will allow tenants to build a better credit history and establish a tenants ability to pay regular monthly outgoings for housing that the banks will eventually start noticing.

Ts can already clearly show that they meet their rental payments, especially if they are paying via standing order.
The process is not being established to improve the credit status of those who rent their home. Experian see it as a vital new income stream, plain and simple.

LLs can already check whether their new potential T has previously failed to cough up on time, and whther they have CCJs against their name.

HAMISH_MCTAVISH wrote: »

And tenants who look after their financial affairs will have access to a better choice of housing than tenants who don't. Ultimately, they'll be rewarded for paying rent on time.

You're still living in lala land where a "good T" is only up against a "bad T" when competing for a property.

If all /the majority of the other potential Ts who are after the same property have the same number of smiley face stickers on their Experian rent records it won't make a ha'p'orth of difference to their chances.

How aggrieved will these newly rated good Ts be when they still end up with a property that turns out to be poorly maintained, with a LL with insufficient resources and a tendency towards insouciance?

There has been little comment about the fact that the intention is that this is targeted only at Ts who are within the Private Rented Sector.

tbs624

Experian_company_representative wrote: »

Importantly - and as is always the case with the sharing and processing of personal data - consent/notification will be a prerequisite of the scheme. Agreements will make it very clear what data will be shared, with whom and how it will be used.

As I think I said in an earlier post on here, we are convinced that this service will bring very positive benefits for consumers, landlords and, of course, lenders. We are determined to get this right and will continue to listen to people's views and concerns as the service develops.

My bolding.

You have still to acknowledge the point made by several of us that Ts won't be giving their consent freely to this proposed sharing of their data - they would in effect have very little option, unless it is made unlawful for a T to be turned down for refusing to grant such "consent"

Ts will, in reality, also end up footing the bill for the addtional check and will also have to pay to access their own records, to check that what has been recorded is truthful. This is at a time when many of the complaints around LAs relate to the spurious admin fees which they charge to Ts, in addtion to the income stream they already have from the client LL.

Thrugelmir

tbs624 wrote: »

Ts will, in reality, also end up footing the bill for the addtional check and will also have to pay to access their own records,

Credit checking is a fundamental part of any business operation. So yes the tenant (the customer) will bear the cost. Whether its a separate or part of the rental charge.

princeofpounds

I'm sure people must have raised an obvious problem already in this thread...

Handing credit record powers to landlords or agents is no different to handing them to Billy Smith down the pub. In fact they often ARE Billy Smith down the pub, private individuals of uncertain morals and zero accountability.

Experian, if you pursue this line of business you are walking into a PR storm of horrendous proportions, as the stories mount up of unscrupulous landlords trashing people's credit ratings for the purposes of harrassment. You cannot have a credible system when you let in data-providers with no credibility themselves.

I also agree with the problem that rental payments are simply not analogous to credit payments. Under law I am permitted to deduct costs of self-enforced repairs from rent under Lee Parker vs Izzet 1971. Should I end up with a trashed credit record for using lawful powers to protect myself from a slumlord?

Oh, and I am now going to cancel my credit expert account in protest. You really make me sick.

(and no, I am not even a tenant myself any more these days, so there is no personal bias here)

tbs624

Thrugelmir wrote: »

Credit checking is a fundamental part of any business operation. So yes the tenant (the customer) will bear the cost. Whether its a separate or part of the rental charge.

You miss the point. Previously within one of the 2 threads there was the suggestion from James Jones that this new proposal would make the application process cheaper for Ts, when the reality is that {edit : it} is extremely unlikely that this would be the case. There has also been the proclamation from another poster that there are no drawbacks and that there is a win-win situation with the proposed set-up.

Let's remember too that those of us who are LLs can put such charges down on the annual tax returns.