MSE News: Rent payments to go on your credit file

HAMISH_MCTAVISH

MissMoneypenny wrote: »

Even more reasons for tenants to ensure they don't sign agreements that makes them responsible for the other tenants rent, if they fail to pay.

No chance for ordinary flat/house shares. Landlords are renting the property as a whole, and expect to get paid the whole rent regardless of whether a flatmate moves out. No different to a "joint and several" mortgage liability.

If a house is set up as an HMO and the landlord is dealing with everyone individually, then fair enough that's different and other tenants should not be liable.

But then the landlord should already be factoring in an increase in rent per room to cover the hassle and time of dealing with multiple tenants and rent collections for a single property.

MissMoneypenny

HAMISH_MCTAVISH wrote: »

No chance for ordinary flat/house shares. Landlords are renting the property as a whole, and expect to get paid the whole rent regardless of whether a flatmate moves out.

That will need amending under the Housing Acts to make that illegal; if this plan goes ahead. The government is going to end up with a lot of people wanting them to house them otherwise and the welfare state is already breaking under the strain.

squeeks

HAMISH_MCTAVISH wrote: »

No chance for ordinary flat/house shares. Landlords are renting the property as a whole, and expect to get paid the whole rent regardless of whether a flatmate moves out. No different to a "joint and several" mortgage liability.

I don't know if you have ever tried to rent a property as a couple. I have yet been able to rent as an individual with my oh as a named occupant. They seem to always insist quite rabidly that they need to do multiple credit checks, one LA even intimated that it was a legal requirement! This farce makes them money and provides the LL with additional security.

With this scheme the double credit check game would make you financially linked and I think some people would walk into it blindly especially people who are new to renting, and presented with the choice of signing a contract (which they probably haven't read in full) or not moving in.

I like my financial independence, I don't have any joint accounts and I don't intend on buying anything on tick (car, house etc..) under joint names - hell marriage doesn't even get you financially linked. But renting now probably will. That is just fantastic...

At the end of the day you are renting a place you aren't sodding buying it. There should be less credit checks - you aren't borrowing several x your annual gross income for the best part of your working life!!! The cost of moving in should be lower, hell I would argue all the LA fees should be paid for by the LL, if you were buying a place it would be the sellers responsibility to pay the EA, not the buyer.

corbyboy

chattychappy wrote: »

I have a friend who is a LL. Some tenants seem to make an industry of not paying and it's a real hassle to get them out, even under the so-called "accelerated procedure". References are pretty useless.

He has no problem with "can't payers" and indeed most of his tenants are fine. It's the won't payers who are the problem. They seem to know their rights very well and exploit to the full. By the time he can get them out, he is left with arrears that will never be recovered.

Not surprising there are so many dodgy landlords out there - he's had enough and is getting out. No doubt a less decent bloke will fill the gap.

And there are plenty of slum landlords out of there too. Does giving them extra power to blacken somebody's credit file really seem fair?

The fact is that renting is not credit and should not be included in your credit file.

callum9999

lazer wrote: »

Rent is paid in advance, so therefore is not credit, so therefore should not appear on credit files.

If you miss a payment, it is still not credit as the landlord usually has 1 months rent as deposit, so as long as you pay it within the month, it is still not credit.

However, over 1 month overdue rent is in effect credit and should be reported on the credit file.

My mobile contract is paid in advance - that's still credit. I don't know how it normally is, but my tenancy agreement is for a year - i.e. I must pay rent for the whole year. Surely other landlords have minimum notice periods as well - many of which would be longer than the actual deposit they hold on you (which again, doesn't mean it's not credit - capital one and mobile networks sometimes take deposits from you).

squeeks

callum9999 wrote: »

My mobile contract is paid in advance - that's still credit. I don't know how it normally is, but my tenancy agreement is for a year - i.e. I must pay rent for the whole year. Surely other landlords have minimum notice periods as well - many of which would be longer than the actual deposit they hold on you (which again, doesn't mean it's not credit - capital one and mobile networks sometimes take deposits from you).

PAY AS YOU GO doesn't go on your credit record.

Monthly contract phones go on your credit record as you are billed monthly based on usage - it just happens that they try and bundle extras for a fee, and most consumers try to match the bundle to their usage, so the bill is typically equal to the bundle cost. *shrugs* people like to know how much they are spending up front, and providers try to make it cost effective to work this way, because they make loads of money if you change your usage pattern, but don't change your contract. + people don't tend to complain about about an under utilised contract, but do complain about an unexpected bill.

A contract mobile is no different to a credit card that would say cost you £300 a month to operate, which the credit card loads £300 on for you to spend. If when using the credit card you spend less than £300 the credit card company would keep the difference between what you spent and the amount they charged. If you spend over £300 on the card, they charge you the excess you spent + 15% for every pound you spent over the £300 charge. It is still a credit product, but the cost is loaded up front and a little obscured. Aren't innovative credit product wonderful.

Renting a property your bill isn't going to vary as the service remains consistent throughout your tenure - house exists, check, I still can live in it, check.

You have a contract for a service not a credit agreement. Just like at work you have a contract to work for X per annum. You can't really get your years wages at the beginning of the contract, though I wouldn't mind... If you are contracting or running a small business, you'll often only get paid when the job is completed with possibly some interim payments as you meet various agreed milestones, assuming you get paid at all.

I suppose the closest argument would be insurance premiums and paying monthly vs annually. If you want to pay monthly, then you in effect take out a loan at a fixed apr with the insurance company which does go on your credit file. Paying annually doesn't go on your credit file. - Is that how you view a rental agreement, as a short term credit product, for those who don't make a full capital payment for a property up front (via cash or a mortgage)?

JimmyTheWig

I think that it is right in theory - as per callum9999's argument - that this can go on your credit report. You are committing to pay and if you don't pay then you get a black mark. Some people will get black marks. Those who don't will then be seen as better tenants than those who do, and so the "good" tenants will benefit.

But in practice I just can't see it working for many of the reasons given above.

jjlandlord

JimmyTheWig wrote: »

Some people will get black marks. Those who don't will then be seen as better tenants than those who do, and so the "good" tenants will benefit.

Again, how would they benefit?

millym

I seriously worry about this proposal. Atm, only those with consumer credit licences (or whatever they're called) can gain access to, and place entries on, someone's credit report.

As someone who always pays my rent, I should see this as a good thing, but placing Ts at the mercy of LAs and LLs like this is something I would never have expected from Experian.:eek:

A couple of years ago I posted the folowing on another thread (discussing Landlord Referencing Services)-

QUOTE/
I an actually see a better solution for everyone concerned, which would involve a tenancy being treated in a similar way to a mortgage or loan. If a tenancy was given as a credit agreement, then it could be recorded with the credit reference agencies. Good Ts would be able to prove they pay their rent. Bad ones could have defaults and CCJs recorded against them.

This would have the added bonus of LAs/LLs being regulated by the FSA - a win/win situation IMHO. /END QUOTE

and I still think my idea could work, but not like they are suggesting. Having entries on a credit report where no credit has been granted, seems ludicrous to me.

It does come across as a money-making scheme, since no regulation of LAs/LLs is mentioned.:(

tbs624

chattychappy wrote: »

I think it's a good thing.

I have a friend who is a LL. Some tenants seem to make an industry of not paying and it's a real hassle to get them out, even under the so-called "accelerated procedure". References are pretty useless.

He has no problem with "can't payers" and indeed most of his tenants are fine. It's the won't payers who are the problem. They seem to know their rights very well and exploit to the full. By the time he can get them out, he is left with arrears that will never be recovered..

Your indignation on behalf of your "friend" is heart warming.

However, Ts such as the ones you describe (who are, let's remember, a minority) usually end up with CCJs against their name which...erm...already come up in current referencing procedures. Your mate has 6 years in which to pursue those arrears via the courts.

On your comment about references being "pretty useless", do bear in mind that a T can have been paying everything on time for years and have a smiley face sticker or three on his records at Experian - that is no guarantee that all will be well for future lets, any more than any other sort of referencing.

Whenever there is any proposed expansion of databases/creations of new ones and further opportunities for data creep then the commercial firms/government or whoever will try to flog it as beneficial for all/for the majority.

The usual pattern is that advance notice is given via the media and the level of opposition/approval gets measured. The marketing boys and girls can then adjust their "education" campaigns accordingly.

The vast majority of Ts can already clearly show, on request, whether or not they meet their tenancy payments on time.