Rental Exchange - New rental data available to lenders in 2014
With little or no credit history, millions of rental tenants have been excluded from mainstream financial services and affordable credit, or paid a premium for access. The Rental Exchange, which provides a route for rental payments to be incorporated into credit reports, is an important development to change this.
By treating mortgage and rental payments equally, we can provide renters with greater access to mainstream finance – from bank accounts and credit cards to mobile phone contracts and utility services. Our analysis shows it would give 93 per cent of social housing tenants a credit ratings boost and provides evidence that most people are responsible consumers, even if they have been off the credit radar.
Rental Exchange – informing responsible lending and affordability decisions
When available to lenders, this data will also provide a significant boost to responsible lending capability. With a truer picture of existing commitments, creditors can better understand levels of indebtedness and affordability. Where people are suffering financial stress, lenders and landlords will be better informed to engage appropriately and sensitively and take steps to help avoid a debt spiral if required.
We are working with Big Issue Invest and over 160 social housing providers (representing 1.9 million tenants) to start populating the Rental Exchange. A number of social landlords have already reached the stage of communicating their intentions to residents. Our CreditExpert service is also being adapted so that consumers can immediately see the impact of rental data on their credit report and score online (a key consideration in using this new data compliantly).
Rental information will become available to lenders during 2014.
For more information on the Rental Exchange, contact us today.