Paying rent on time should be counted towards a tenant’s credit score to make them more appealing as applicants for rental property, says a referencing and insurance firm.
The call comes after research found that 46% of landlords would refuse an application from a new tenant with a poor credit history. However, credit histories do not currently form part of regular checks for new tenants.
The Landlord Secure figures showed that 48% of landlords would refuse a tenant who had been subject to a county court judgement in the past, while 42% would reject an application from a tenant with past insolvency issues.
Applicants with existing debts like credit cards or loans would also raise red flags for 30% of landlords, while those in receipt of housing benefits would struggle to be accepted by 19% of UK landlords and those on Universal Credit would fail against 16% of landlords.
Steve Burrows, managing director of Landlord Secure, said tenants are left at a disadvantage as they can’t boost their score by being a reliable rent payer in the same way a credit report would show how well a home owner repays a mortgage.
He said: “Those in rental properties are at a serious disadvantage when it comes to building a credit rating because paying rent on time doesn’t count towards this score.
“Given that landlords would put more weight behind a tenant’s credit score, those in rental properties should be given the chance to build a better credit score based on their history of paying rent on time.”