MSE News: Rent payments to go on your credit file

MissMoneypenny

tbs624 wrote: »

The Government will not want to risk upsetting PRS LLs by removing the J&SL tenancy.

That's Statutory law. I was thinking it would happen through Common Law, through the courts. Just as murder is common law.

The government is still going to end up with the problem of housing increased numbers. Councils are already creaking under the strain of housing the homeless.

lynneinjapan

Swampmonster wrote: »

I really don't think this is a good idea at all.

Both myself and my Husband have been made Bankrupt at seperate times in the last few years. We are both now discharged and neither has got and have no desire to get credit ever again. So as it stands at the moment are credit rating is not really of any concern.

However when this is introduced if we needed to move house (rented) we would have extreme problems getting a new rental agreement as Bankruptcy remains on your credit file for six years.

I'm begging the Government not to do this especially as we are in such difficult times at the moment. We would be judged by past mistakes, financially linked to problematic ex's and flatmates and penalised if you have a change of circumstances that forces you to claim Housing Benefit/LHA and the long processing claim time means you are late with the rent.

If you apply for a rental property then most letting agents / landlords will run a credit check on you anyway, and it's likely that you'll be rejected on the basis of your past bankruptcy, with no evidence of a good rent payment record since then. On the other hand, if you are honest about your past mistakes and show a good rent record for the past, say, three years or so, then your application might be viewed in a more favourable light.

ruggedtoast wrote: »

I have a friend who is a tenant. Some landlords seem to make an industry out of not paying for repairs, intruding on privacy, and inventing spurious reasons to withhold deposits. Even under the so-called "Deposit Protection Scheme". The assurances they give are useless.

Such landlords do exist but are breaking the law and can - and should - be reported to the police/council/Trading Standards.
If they have met the legal requirement to protect the deposit then they can only withhold money with the tenant's agreement, or if the arbitrator judges in their favour (which will only happen if the LL has convincing evidence, as it's the tenant's money). If they haven't protected the deposit then the tenant can take them to court to get the whole deposit back plus up to three times as much again. Until next month they can get away with protecting the deposit at the last minute but from 6th April they have a fixed 30-day deadline to protect it and serve the tenant with the appropriate prescribed information.

I do agree with some of the concerns raised about how the scheme will actually work in practice, and appreciate that there is the potential for abuse, but I think the basic idea is good.

JimmyTheWig

tbs624 wrote: »

(1)Let's remember that this proposed new addition to the battery of extensive checks that are already undertaken will be charged by the LL/LA to the T.

(2) LLs can already check up on whether or not a potential T currently pays on time (and/or has done in the past) and whether s/he has CCJs etc .

jjlandlord wrote: »

You assume that currently landlords have no way whatsoever to check who's probably a good or bad tenant, which is not the case.

Fair enough, but assuming they are wanting landlords to pay to do a check, I presume the implication is that such a check will provide more detail than they currently get without doing such a check. Otherwise it would be a business model doomed to fail and no-one needs to worry about it!

tbs624 wrote: »

(3) Why should a LL reduce his rent for a potential new T because any records show him/her to have previously met their obligations?

Good tenant for £680pm or bad tenant for £700pm? I know which I'd choose.

jjlandlord wrote: »

You also ignore the risk to all tenants of having erroneous data input on their credit file by letting agents or landlords...

I do no such thing:

JimmyTheWig wrote: »

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

jjlandlord wrote: »

Even without erroneous data, could being a few days late on rent payment once impact the credit record for years?

Why is that any different (ignoring semantics about one being credit and the other not) about being a few days late on a credit card payment?

jjlandlord

MissMoneypenny wrote: »

Damages claims awarded against erroneous data on credit files from LAs and LLs would boost the tenants savings. That's a benefit.

Tenants' would actively seach for the useless LAs and LLs, instead of trying to avoid them!;) Something else for Experian to make a list of and then sell to the tenants.

I hadn't thought of that!

JimmyTheWig wrote: »

Good tenant for £680pm or bad tenant for £700pm? I know which I'd choose.

Yes, you do not choose the bad tenant. Full stop.

JimmyTheWig wrote: »

Why is that any different (ignoring semantics about one being credit and the other not) about being a few days late on a credit card payment?

Because in exchange for an hypothetical (imo, non-existent) benefit, a tenant would risk a world of pain...

MissMoneypenny

JimmyTheWig wrote: »

Why is that any different (ignoring semantics about one being credit and the other not) about being a few days late on a credit card payment?

You're correct, there is no difference. A late payment is a late payment. The mark is already on their credit file for the late credit card payment, so adding another for late rent won't make that much of a difference. If the tenant is late paying their rent, then they will probably be late paying things like credit cards too. Landlords already credit reference tenants.

It just seems to me that this is being all wrapped up in pretty paper with a nice little bow, to get some landlords excited. But open that package and it is just a big list of all the rented properties all in one place; that can now be easily accessed by lenders (past, present and future); HMRC; welfare departments; baliffs etc.

Experian_company_representative

squeeks wrote: »

Shouldn't it be the credit agencies responsibility to notify someone that data is being stored about them, rather than requesting it?

The data will only be registered with the tenant's consent. It will then only be accessed by the lender with the tenant's consent each time they apply for credit. We will also be running a high profile education programme to make sure people understand what is happening, what their rights are plus the threats and opportunities.

I agree with some earlier posters, rent isn't credit. But that doesn't mean it's irrelevant to credit ratings. We used to hold a lot of TV rental data until people starting buying their own. It's a major financial commitment and a priority one at that. It is very relevant to creditworthiness calculations. Rent data will not be part of our credit account sharing scheme (CAIS) - it is a separate ring-fenced dataset.

We are reading all of these comments and we will take on board people's concerns. We are determined to get this right.

James Jones

Experian_company_representative

jjlandlord wrote: »

Hmm, how do you propose tenants might benefit from this with respect to the current situation?

I'm guessing that it would make 0 difference if rent was always paid on time, but it would obviously degrade the credit score if it was not.

Simple - most people ray their rent on time and will, if they consent, be able to be rewarded for this with positive payment data on their credit reports. Same as mortgage holders. It's early days yet but we certainly anticipate this data providing a shot in the arm for many people's credit histories, particularly those with thin credit reports.

James Jones

Heliflyguy

If "Rent data will not be part of our credit account sharing scheme (CAIS) - it is a separate ring-fenced dataset" then how will it be "providing a shot in the arm for many people's credit histories, particularly those with thin credit reports." except for the purpose of renting.

And whats wrong with contacting a pre LL and asking if the rent was paid ok?

Another way to squeeze more money from the system by Experian and from T's by letting agents who will no doubt ramp up the cost and refuse to deal with a prospective T unless they payup

Experian_company_representative

corbyboy wrote: »

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

We already hold lots of information that isn't credit. We are not called credit reference agencies because we run credit agreement databases. The CRA's role is to collect information that is relevant to your financial standing, which can then be accessed with your consent to support your applications. It's set out in the Consumer Credit Act. Regular financial commitments such as rent, like mortgage payments, are very relevant to credit scoring.

James Jones

Experian_company_representative

mynameisclare wrote: »

I'm sure this will do nothing to help the already extornionate fees agents charge for referencing.

But that's the thing - it'll much be much easier and quicker for agents and landlords to establish that someone is a reliable tenant, probably cheaper for them too. So it should really improve the tenancy application process for people. I suspect it will make it cheaper too.

James Jones