Banks and financial institutions already have access to a wide range of financial information to help them decide whom to offer credit to, but by the end of this year, rent payments will be added to the list and if a tenant fails to pay their rent on time, it could affect his or her credit rating.
The largest credit reference agency in the UK, Experian, is currently in talks with some of the bigger landlords and letting agencies in a bid to persuade them to include a clause in future tenancy agreements that allows them to hand over information on a tenant’s payment history. Once the data starts rolling in, it will soon appear on credit files, although many smaller amateur landlords may choose not to sign up the scheme and it will therefore not cover everyone.
How will this move affect landlords?
Sharing financial data on a much wider scale will offer landlords a number of advantages. Landlords will be able to pay a fee to search a potential tenant’s credit file in order to check their rent payment history. By doing so, you will be able to see if a tenant has a history of being late with their rent payments, or has ever failed to make payment.
Are there any disadvantages to the sharing of rent payment information?
Tenants who sign up for joint tenancy agreements could find their credit rating shot to pieces through no fault of their own. For example, if one flatmate misses a rent payment, it will count against ALL tenants living in the same property.
