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Should rental payments be considered to boost credit score?
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
An interesting survey of nearly 3,000 buy-to-let landlords, carried out by the Residential Landlords Association, suggests that 61% would back a link between good private tenants and their credit score.
Over six in ten landlords questioned said private tenants who pay their rent on time should receive a boost of their credit score, to make it easier for them to get a foot onto the housing ladder.
Credit Rating
Routinely, credit rating agencies do not consider rental payment history when calculating credit scores. This can make it difficult for them to obtain a mortgage, even when tenants have not fallen behind on their payments.
The Residential Landlords Association believe that including rental payments in this way would make it easier for landlords to gain a better understanding of a would-be tenants’ credit and rental payment history.
Should rental payments be considered to boost credit score?
Alan Ward, chairman of the RLA, noted: ‘With many tenants wanting to buy a house of their own, it is absurd rent payment is not routinely included when undertaking credit checks for mortgage applications.’
‘Moving to such a scheme would help not just tenants, but also landlords by giving them a clearer sense of whether a prospective tenant has historically paid their rent in full and on time.’[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/paying-rent-in-full-and-on-time-should-boost-a-tenants-credit-score-says-rla
