Rent Contributing to Tenants Credit Scores
More progress is expected today in the passage of a Bill which will allow good tenants credit scores to count towards their creditworthiness.
The Creditworthiness Assessment Bill – started in the House of Lords by Big Issue founder Lord Bird – today gets a Second Reading in the House of Commons.
Currently rental payments of the UK’s 11m renters do not contribute to their creditworthiness in the same way as, for example, mortgage payments.
Substantial numbers of lettings bodies like NALS and credit organisations such as Experian are broadly in favour of the proposal.
Today’s debate in the Commons comes as data from consumer research company Equifax suggests the principle of rent contributing to tenants credit scores has won the support of 80 per cent of the British public.
A survey conducted with YouGov shows 48 per cent of tenants never expecting to own their own home, with almost half of them blaming the size of the deposit as being the chief obstacle.
When asked to imagine they were buying a house, 29 per cent of renters said they would expect to be able to get a mortgage with payments similar to their current monthly rental payments, while a quarter believe they could access a mortgage with monthly payments higher than their rental payments.
Homeowners are much more confident they’ll be able to get credit than renters – in the same survey, 41 per cent of owners expected it to be very easy, compared to 11 per cent of tenants.
Nearly a third of renters have been turned down for credit, compared to just 14 per cent of home owners.
For renters who’ve been denied credit, almost half were told by lenders that they didn’t have a high enough credit score.