RentalStep has added its voice to growing calls for rent payments to be added to a tenant’s credit score.
The PropTech startup supports the government's Creditworthiness Assessment Bill and the movement towards mandatory inclusion of tenants’ rental payment histories in credit scores.
Launched last year, the Creditworthiness Assessment Bill aims to make this measure a legal requirement. The Bill, put forward by Big Issue founder Lord John Bird, is currently awaiting a third reading in the House of Lords, before being debated in the House of Commons.
Many experts believe that adding rental payments to credit scores as a mandatory requirement would help encourage more tenants to pay their rent on time.
“We are delighted to see the cross-party and property industry support this movement has received so far and we relish the opportunity to continue working with the government to make this much-needed requirement a reality for all tenants,” said Mike Georgeson, founder and chief executive of RentalStep.
“Making sure that all rent payments contribute towards credit scores should be considered a matter of urgency,” he added.
People rent for a variety of reasons; from the flexibility it provides to the increasing difficulty of affording a mortgage to buy a home. Consequently, the number of people moving into the rental market is expected to continue growing, which is why it is now more important than ever that rent payments are recorded and contribute towards a credit score, according to Georgeson.
Georgeson continued: “Rent is often described as ‘dead money’ but if it contributes towards helping renters get a loan or mortgage in the future, it can become much more valuable.”
RentalStep is already working to provide a solution to this long-standing problem with its TenantPassport.
The PropTech innovation allows landlords and letting agents to verify tenants’ monthly rental payments. RentalStep has also partnered with Experian, meaning that as tenants pay rent on time over a prolonged period, their credit score will subsequently increase.
“Our TenantPassport is free for renters and provides landlords and agents with comprehensive reference and credit reports of prospective tenants,” Georgeson explained.