A firm which aims to build up tenants’ credit histories has defended rent reporting amid queries as to how workable current propositions are.
Several stories in recent weeks have seen EYE readers question whether lenders really take notice of rental payments being recorded on credit reports.
One provider, Canopy, which records rental payments on Experian, told EYE it is already reporting around £10m of annual rent to Experian since launching in June through its RentTracking tool.
Jon Pitt, chief commercial officer at Canopy and former head of lettings at Hamptons, told EYE that while many lenders won’t specifically take rental payments into account, they will be looking at an individual’s credit report and score, which can be boosted by having their rent tracked.
He said: “Canopy has experienced growing interest from a range of financial institutions to access and incorporate rental payments data into credit risk models.
“Rent tracking will also benefit the property sector through a reduction in risk of rental arrears.
“Renters who make a conscious decision to track their rent payments are also less likely to intentionally miss a rent payment.
“Canopy’s RentPassport and RentTracking helps renters manage their rental history at no cost. Paying rent and bills on time improves access to affordable financial products and will also give access to better properties.
“Rent tracking and rent recognition is new to the market. There is a clear benefit to renters financial well-being, and we are confident that the industry will embrace and support this innovation.”
EYE asked for names of specific lenders who are taking note of rental payments, and Pitt said: “Canopy has experienced growing interest from a range of financial institutions to access and incorporate rental payments data into credit risk models.
“We have also received partnership requests from specialist mortgage providers.
“Currently we are not aware of any lender who specifically takes rental payments in to account, but to our knowledge all lenders will review a mortgage applicant’s credit profile prior to approving a mortgage.”
Canopy, out of this £10m worth of rent reporting…. has a single tenant got access to a better mortgage like you advertise on your site?
Simple question. Please provide a simple answer. I know you’ll read this.
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Hi Light, thanks for the comments. Hopefully this answer is simple enough!
Canopy launched Rent Tracking in June, and like any relevant or regular payment that contributes to a credit score, it does take time for this to have an impact. We report the data to Experian, so at this time Canopy Rent Tracking only impacts the Experian Credit Score. Since launching, we have had positive feedback from many of our users.
Canopy is not involved with mortgage applications, so we are unable to comment on whether or not renters using Canopy have agreed new mortgage deals since they started tracking their rent. Rent Tracking is about improving credit scores, not only access to mortgages, so can also help with loans, utilities, credit cards etc.
As more renters take an interest in ways to build their credit scores, without the need to take on debt or credit cards, we hope that all the data exchanges will start to standardise how they recognise rent payments. As the article states, we have had financial institutions engage with Canopy to understand how to incorporate rental payments data in to credit risk models.
Rent Tracking is still in its infancy, and we are very grateful for the support received from the property industry in promoting financial wellbeing to their customers.
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