ClearScore has launched a free rent payment reporting service that allows private sector tenants to add their rental payments to credit reports held by all three major credit bureaus in the UK.
The service enables tenants to report payments to Experian, Equifax and TransUnion through the ClearScore app or website, addressing a long-standing gap in credit assessment where mortgage payments have historically been recognised whilst rental payments have not.
While CreditLadder and Canopy have offered similar services for some time, ClearScore’s offering is the first to provide rent reporting at no cost. The company states that reported payments will be included in credit scores assessed by mortgage and other lenders.
Market context
The launch comes as research reveals that the average renter has paid almost £60,000 in rent over their lifetime, with one in five having paid more than £100,000. Seven in ten renters estimate they are paying the same as or more in rent than they would on a mortgage for a suitable home.
The initiative addresses calls from successive governments and MPs, including the 2017 Creditworthiness Assessment Bill, to incorporate rental payment history into credit assessments.
Justin Basini, Co-founder and Chief Executive of the ClearScore Group, said: “ClearScore is giving UK renters something that we feel is long overdue: free rent reporting, connected to all three credit bureaus, means that every rent payment finally counts.”
Sam Carling, MP for NW Cambridgeshire, commented: “Young people, and others with a thin credit history, face significant barriers in proving to mortgage providers that they’re responsible with their finances, because their monthly rent payments haven’t been factored into the credit reporting system.”
Industry response
Sheraz Dar, CEO of CreditLadder, said: “We’re pleased to see greater attention being given to rent reporting and the benefits it can deliver for renters. CreditLadder has been championing this cause for more than a decade because we’ve long believed rent should count when assessing financial reliability.”
CreditLadder announced it is introducing free cashback for all customers this week, as competition in the rent reporting sector intensifies.
The development may have implications for corporate landlords planning expansion amid rental reforms, as improved tenant credit profiles could affect lending decisions. The service could also influence housing market dynamics by potentially enabling more renters to transition to homeownership.
Justine Greening, Chair of The Purpose Coalition and former Secretary of State for Education, who championed the 2018 Creditworthiness Assessment Bill, said: “Eight years on, it is fantastic to see ClearScore develop a practical, free solution to this longstanding issue.”
