Date Published 27 June 2023
With interest rates rising, millions of renters feeling the pinch as landlords transfer their increased mortgage expenses on to their tenants, the dream of becoming a homeowner one day might seem a long way off.
Yet, most renters the UK are paying more on their monthly housing costs than they would if they actually bought the home they lived in.
So, could this cloud have a sliver lining? It may well do...
Did you know your rent payments can now strengthen your credit history and improve your credit score?
This is great news if you dream of becoming a homeowner one day but have rented for many years previously.
By improving your credit position you can increase the likelihood of accessing more affordable credit e.g. better rates on loans/credit cards, but more importantly, mortgages.
Rent reporting can strengthen your Experian credit history and improve your Equifax credit score.
What are my options for reporting my rent payments?
If you're a tenant, there are different options if you want your rent payments to be recorded on your credit file.
A free scheme called the Rental Exchange Initiative records your rental payments and adds them to your Experian credit file.
You can ask your landlord or social housing provider if they're part of the scheme (if you're in social housing and your provider is participating, your rental payment information should be automatically recorded).
If your landlord or housing provider isn't part of the scheme, you can still self-report using companies such as CreditLadder or Canopy, which is also partnered with Experian.
It's worth noting that, other than CreditLadder, the schemes mentioned above will only report your rent payments to Experian.
And remember that all of these schemes work both ways, and you'll only benefit if you always pay your rent on time. Missed or late payments will also show up on your credit file, potentially damaging your attractiveness to lenders.
If you're a tenant and need advice, simply give our friendly team a call. You'll be so glad you did.
