A new referencing service can include rent payment history on credit reports. This means that tenants who have been reliable rent payers could see their credit history strengthen. Mortgage payments have always been included on credit reports, meaning that a good record of paying off a mortgage has always helped a home owner’s credit score. Unfortunately for tenants the same has not usually applied to rent payments.

Credit referencing agency Experian has now launched Rental Exchange and they say that millions of private tenants could find their credit ratings improved because rent payment history can be included in reports. This could be very interesting to a number of our landlord insurance clients. It might also make it easier for first time buyers to obtain mortgages because a good history of rent payments will help the credit report seen by the lender.

Many organisations use electronic identity checks based on credit reports and stronger reports will help to speed these up for tenants. Renting a property is now such a common option that it seems strange that rent payments have not traditionally been taken into account.

The new service has been welcomed by the National Forum for Financial Inclusion who believe it could help tenants in private accommodation to access a range of services where a good credit report is required. Of course, those tenants who do not build up a good pattern of regular rent payment will suffer.