Experian launches rent payment profile for tenants

by Property118.com News Team

14:52 PM, 16th March 2012
About 7 years ago

Experian launches rent payment profile for tenants

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Experian launches rent payment profile for tenants

Missing a rent payment could affect a tenant’s credit rating as one of the largest credit checking firms opens a new service for landlords and letting agents.

Experian is opening data files on a tenant’s rent payment history as a new check for landlords and letting agents vetting renters who want to move in to their homes.

The service is likely to do away with references and allow landlords to make more informed decisions about whether to let.

For tenants, failing to pay the rent could damage their credit profile when they seek borrowing, like credit cards, loans or a mortgage to buy their own home.

Experian is selling the service as a way for tenants to strengthen their credit history and to help them qualify for better and cheaper credit.

Landlords and letting agents will have to pay a small fee to access Experian’s Rental Exchange – but the company also wants them to sign up as information providers.

Due to data protection laws, tenants will have to agree that their payment data is forwarded to Experian.

The company reckons that gathering data on the UK’s 3 million plus tenants will take at least year due to the disparate nature of the lettings industry, which is largely managed by independent landlords and letting agents.

Paul Vescovi, UK and Ireland managing director of Experian credit services, said: “With several million people living in privately rented accommodation, a significant percentage of the population could be missing out on mainstream, low-cost credit because lenders do not currently have a comprehensive picture of their financial track record.

“The Rental Exchange will strengthen people’s credit histories, helping them to access a wider range of credit deals.”

Another of the big three credit agencies, Callcredit, is also rumoured to be looking at a similar service.



Comments

15:11 PM, 16th March 2012
About 7 years ago

This is a fantastic landmark & way forward for the future of the
Private Rented Sector, both for landlords AND tenants in this country.
Again, we are proud that Landlord Referencing can be party to assisting
Experian in the future in any way we can, with our vast database, to
work together on this revolutionary initiative.
Whilst still offering our fantastic free lifestyle references; yet still maintaining our unique identity and the security, privacy & respect of our community.Read the original press release here> http://www.landlordreferencing.co.uk/blog/2012/03/15/exclusive-experian-press-release/

Mary Latham

16:18 PM, 16th March 2012
About 7 years ago

I am delighted for good tenants but this may also deter those who don't see rent as a priority when they have crfedit cards and loans to repay. Universal Credit has the potential to put many tenants in the situation where they must prioritise their financial commitments and rent may just have move higher up that list.

I can feel a new blog comming on.

18:55 PM, 16th March 2012
About 7 years ago

I think you are absolutely correct.
Rent is is the top priority debt, just like paying the mortgage.
Tenants seem to think, with some justification that it won't affect them if they don't pay their rent on time.
Having this facility will be useful. but I think it is a bit of a cheek to charge LL when we are supposed to update the info for them for free!
When you think that Callcredit already offers free access to their creidt files via the noddle.co.uk service why would anyone pay experian.
I think we are rapidly getting to the stage where credit reports etc will be free to individuals on the basis that the more accurate data the credit agencies have the better offer they have for their business customers.
Nothing motivates someone more if they know they may keep their credit files accurate for no charge; which is what all prospective lenders want.
This as it enable them to target their offers more effectively.
It is almost a googleisation of data.
Google seem to have done ok out of providing everything for free!
The USA have had this for years.

Rob

7:47 AM, 17th March 2012
About 7 years ago

Great idea but why would i want to "pay" experian just so the tenant can build up there credit score,im just not going to bother ive done just fine without this service for the the last 10 years so why add another expense to my accounts. Just like the deposit protection scheme "great idea" but why should i pay £30 a time just so the tenant can take me to court if i charge them for something!

12:58 PM, 17th March 2012
About 7 years ago

I like this idea a lot. Tenants should be rewarded (with a better credit record) for prompt payment of rent. However will this new service result in lower application fees for tenants? 

Many letting agents throughout the UK still charge new tenants high application fees for information that readily available for free! For example, the free credit record service offered by Noddle.co.uk (referred to by Paul Barrett).

I hope  Experian's new initiative and increased Social Networking (i.e. http://www.rentfare.co.uk, Facebook,Linked-In & Twitter) will help to reduce these application fees in the near future. 

 

Mark Alexander

13:37 PM, 17th March 2012
About 7 years ago

@twitter-477855604:disqus  - interesting point. How much do you think is a fair fee to charge as a letting fee based on what I need to do to protect my tenant, their potential new neighbours and my investment:-

1) Advertise the property and arrange viewings
2) Complete and process applications
3) Visit them in their current home to see how they live
2) Network referencing
3) Credit check (tenant and guarantor)
4) Produce compliant Tenancy Agreements
5) Produce compliant Guarator agreements
6) Complete a full and accurate inventory
7) Arrange gas checks and provide certificates
8) Ensure that EPC is in date and provide copy certificates
9) Arrange check in and provide advice on use of appliances and avoiding damp
10) protect deposits and provide certificates
11) Self insure or purchase Rent Guarantee Insurance
12) Insure my landlord liabilities

I charge £150 for this which equates to around £25 per hour.

Is that fair in your opinion?

My list is quite simple as I don't target LHA tenants or rent out HMO's.

 

16:58 PM, 17th March 2012
About 7 years ago

Hi Mark,

Thanks for the question(s).

Charging every new tenant a flat fee of £150 regardless their rental
history or time spent on the application process is the issue. A lack of transparency with regards to
these fees is also a problem; indeed do you supply every applicant with a
breakdown of the £150 fee (by item on your list below)? And how much do you
charge for a joint application? £300?

Many tenants rent from high
street letting agents already and have previously paid expensive application
fees when applying for their current/previous residence(s). Most would argue
that dependant on acceptable references (tenancy & employment) and personal
credit reports from their current letting agent or own personal records why
should they have to pay such a high fee again?

Indeed how much would you
charge if a new applicant had a profile page on Rentfare.co.uk with the
following details already available?

 - A full Tenant Reference from the current Landlord/Letting Agent
including copies of the following documents from the previous checks; tenants
references from previous Landlord/Letting Agents, credit checks and employment
references.
- A copy of a current personal credit report.
- A reference from a current employer.
- A complete application form.

If letting agents were to
embrace social networking when checking a tenant’s references (a social
reference record) then I’m sure the time spent on new applications would be
reduced, good tenants would be identified easier and therefore the fees
reduced.

Can I also ask if you charge
the Landlord/Client for the points marked with a (*)? It seems that a lot of
these costs, previously recovered from the Landlord/Client, are now recovered
via the tenant to reduce the charges to the Landlord/Client.

1)   Advertise the property and arrange viewings - * Most
tenants would expect this cost to be covered by the management fee charged to
Landlord/Client?
2) Complete and process applications – A
nominal fee.
3) Visit them in their current home to see how they live – How
widespread is this practice? I’ve not experienced it personally but would
suggest that it could reduce the need for in depth checks and therefore reduce
fees.
4) Network referencing – * See my comments above.
5) Credit check (tenant and guarantor) – * It’s
becoming more apparent (from the article above) that the cost of requesting
credit checks is reducing, so much so that they are now often free!! So why
charge?
6) Produce compliant Tenancy Agreements – A
nominal fee. Filling in a compliant TA template
with the applicants details does not take long.
7) Produce compliant Guarator agreements – As above.
8) Complete a full and accurate inventory – * A
nominal fee or covered by Landlord/Client management fee.
9) Arrange gas checks and provide certificates – * A
nominal fee or covered by Landlord/Client management fee.
10) Ensure
that EPC is in date and provide copy certificates - * A
nominal fee or covered by Landlord/Client management fee.
11) Arrange check in and provide advice on use of appliances and
avoiding damp – Free…advice should cost nothing.
12) Protect deposits and provide certificates – Free,
it was free before deposit protection was required!
13) Self insure or purchase Rent Guarantee Insurance & Insure my
landlord liabilities – How much is your insurance? Spread across all of your tenants is
this really that much?

I charge £150 for this which
equates to around £25 per hour.

Is that fair in your opinion? The short answer…No, not for all tenants. If you were to spend only 2 hours checking these details, and receiving acceptable responses, would you only charge them £50?

My list is quite simple as I don't target LHA tenants or rent
out HMO's.

Looking forward to your Response.

Kind Regards,
Sam

Mark Alexander

17:32 PM, 17th March 2012
About 7 years ago

@twitter-477855604:disqus  then we will have to agree to disagree. Firstly, we manage our own properties, time is money, we choose not to employ an agents. Second, agents charge a lot more than us. Up to 6 weeks rent to let a property and 15% of rent. I don't have a problem with that, I know what they do for their money and good agents earn it. That said, it's not commercially viable for my family to pay those fees so we simply choose to save the money and do it ourselves. We charge £150 for the due diligence I described above for a couple and an extra £50 for subsequent tenants, maximum 4 tenants in total as we don't do licencable HMO's. Regardless of what is presented by a tenant we still do our own checks. We have never had a cannabis farm or anything like that and we never intend to, hence we only trust our own due diligence.

The typical cost of referencing and 6 months RGI is £95, my family get a deal based on volume for just under £50 as we've set up our own management company. The balance of our fees pays for our time. If we didn't have a queue of people wanting to rent our properties when they come onto the market we would have to reconsider our charges or whether we wanted to stay in business. We don't have that problem though, we provide quality property and sensible pricing and recently we've had tenants bidding against each other by offering us higher that advertised rents to live in our properties. The things you have said are free are not really free, they take time. Maybe we can get a free credit check but can we get somebody to provide us with free landlords, bankers and employers references and then provide us with Rent Guarantee insurance for six months for free? Nope, it's never going to happen is it?

Thanks for focussing my mind on this, we haven't increased our prices for a very long time. Having thought through everything we do we may now have to reconsider, especially based on the current strength of the rental market.

17:32 PM, 17th March 2012
About 7 years ago

If you were to spend only 2 hours checking these details, and receiving acceptable responses, would you only charge them £50*? 

* Sorry £60...maths went out the window for a minute there.

Mark Alexander

17:38 PM, 17th March 2012
About 7 years ago

If it only took two hours to do everything on this list I woud be cutting corners and putting my tenants, their prospective neighbours and my own investments at risk. The horror stories I publish on this site are often as a result of landlords failing to do due diligence, either due to sloppiness or lack of knowledge of what should be done for everybodys protection and benefit.

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