In the hope of improving the efficiency of making rent payments, property marketplace TheHouseShop.com has partnered up with Experian. Together they will launch a new smart rent collection service, which will give landlords a way to incentivise punctual payments from their tenants.
This service will be the first of its kind within the UK, allowing landlords the ability to control such situations without the need for larger financial institutions.
Over £900 million of rent arrears a year have been drastically impacting landlords financially, creating a large amount of unnecessary stress. It could be said that the occurrence of these arrears is down to a lack of prioritising on the tenants’ part. Some take care of other outgoings, such as utility bills and credit card payments, leaving little thought to making prompt payments on their rent.
With rental payments not affecting an individual’s credit rating, it is understandable why their priorities lie as such.
Having a positive credit history is important in today’s society. If you have a credit check done against you and fail due to a bad rating, this in itself could make your rating worse, therefore lowering your chances of passing future checks. If you find yourself in need of a finance plan, for example for an emergency replacement of a refrigerator, or the leasing of a car, you will want to have a positive history. Thinking long term, if you eventually decide to become a homeowner, mortgage lenders do thorough checks for such information.
Now, however, with Experian’s partnership with RentScore, the smart rent collection service, perhaps this imbalance will be resolved. Available to all private landlords in the UK, it is powered by TheHouseShop.com. By way of Direct Debit, tenants will make their payments in a way that is registered with Experian’s Rental Exchange, essentially meaning that any late or missed payments will count towards a tenant’s credit report.
As well as the landlord benefitting from more prompt and reliable payments, this service can also provide the ideal way for a tenant to build up a solid credit rating. This will allow tenants to better prepare themselves for future important finance applications, such as a mortgage.
TheHouseShop.com recently commissioned a YouGov survey looking into the opinion of the general British public in regards to whether rent payments should count towards an individual’s credit score. The results showed that 72% (excluding those who answered “don’t know”) believe that they should.
Nick Marr, co-founder of TheHouseShop.com, has commented on why RentScore is beneficial for both tenants and landlords. He has said: “All landlords worry about their rental income, especially if they have a Buy To Let mortgage that needs paying every month regardless of whether their tenant has paid or not!
“Dealing with the hassle of rent collection and chasing payments can be a major cause of stress for a landlord, so anything we could do to minimise that pressure was going to be popular.”
Having such a vital change made to the world of tenancy should in theory cause many renters to re-evaluate their financial priorities, and help to create a more positive relationship between landlord and tenant.
Marr went on to say: “Our partnership with Experian and the Rental Exchange has allowed us to offer a smart rent collection service that goes above and beyond to help minimise the risk of late or missed payments.
“From the tenant’s perspective, RentScore acts as both the carrot and the stick – giving them the chance to improve their credit reports if they pay on time, but adding the risk of negatively impacting their credit file if they don’t. So, it really is a win-win for both parties.”
It is also worth remembering that there is extra financial help available for landlords. Just Landlords can provide you with Rent Guarantee Insurance, protecting you from the risk of rent default by your tenants.