Reducing/avoiding rent arrears – I’ll have some of that pleaseMake Text Bigger
After reading Experian launches rent payment profile for tenants, I am perfectly prepared to give a person a chance for a new start but I cannot afford to take people who will not pay their rent. Many landlords feel like this too. Many of us are in a position to pick and choose our tenants and just won’t take a chance but we all need to remember, as the all financial investments warn, “Past performance is no guarantee of future” and those landlords who avoid tenants on LHA are just one P45 away from that tenant.
In my opinion, Experian are offering financial inclusion for the many people who have gone through a difficult time and have poor or no credit history. Most of us have made mistakes but unless we are allowed to move on we cannot get our lives back on track. Landlords are often nervous because we have no idea which people are trying to move on and which are going to continue to be bad payers. This, in my opinion, will help us to sort out those two groups and reduce the risk when taking a new tenant.
Even tenants who have had a long good credit history can lose their jobs, go out of business, end a relationship and all these things impact on the financial stability of that person and can ruin their credit rating. Many tenants become trapped when they take expensive loans to get them to pay day and they will now qualify for more affordable loans which will put less pressure on them and enable them to continue to pay their rent.
This is what I am going to do to use this service to help me with two of the biggest problems facing landlords in the PRS at the moment – to protect those rent payments and prevent antisocial behaviour:
- Every person who wants to take one of my properties is going to be told-
- I will be checking your credit rating with Experian and this will include your rent payment history
- I am a member of LandlordReferencing.co.uk and I give all my tenants a reference at the end of the tenancy – what that reference says is entirely up to them but I prefer that it is a good one with no rent issues or antisocial behaviour
- Payment of rent will now impact on their credit history through Experian, who are now adding rent payment history to their credit rating, this will give them an opportunity to build a good credit rating or may spoil an existing rating which again is entirely in their hands
- My referencing process will give me both a credit rating and a lifestyle reference because I am careful not to take tenants who will upset other tenants and neighbours. This way, they can be sure that they will not be living close to other tenants who will spoil their enjoyment of the property
- If they have had past issues but have built up a good record of previous rent payment and life style I will offer them a tenancy
- I am on good terms with the neighbours who will not interfere with them but will inform me if there are any problems.
- I do not accept large advance rent payments but I will take the normal six weeks deposits, one month’s rent in advance and a guarantor with a good reference/credit rating if their own is poor.
The reason for this last point is that I have often been approached by people who have lived abroad, have lost their jobs, who are recently separated or divorced or people newly out of education and often they have no credit rating in this country or their financial history is tied up with a previous partner/spouse.
- When I house students I will tell them that this system will give them the opportunity to build a credit rating by paying their rent and utility bills on time and in full and that this will help them when they leave education and begin their “real” lives.
Loss of rent, damages and antisocial behaviour are the biggest potholes in a landlord’s road I now feel better equipped to spot and avoid them.
Experian have changed the landscape for landlords, reducing the risk and encouraging tenants to prioritise rent payments–
I love it!
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