Why our partnership with Experian works well for landlords and tenants

19 July 2019

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In our previous blog we outlined why property management is so crucial for landlords – for peace of mind, full compliance and a smooth, hassle-free tenancy.

Here we explain why our partnership with credit score and credit reporting giant Experian – which sees us use a product known as The Rental Exchange – is highly useful for both landlords and tenants, and can further help with the smooth management of the rental process.

What is The Rental Exchange?

With the aim of treating tenants and homeowners equally, Experian partnered with Big Issue Invest – the social investment arm of The Big Issue Group – and worked closely together to create The Rental Exchange to help tackle the challenges faced by renters in the UK. This includes financial, digital and even social exclusion challenges that tenants might face when renting a property.

“By observing rental payment data in the same way that we view mortgage payment data, we can unlock a range of benefits for tenants, housing providers and credit providers,” Experian’s website says.

The Rental Exchange also incorporates a tenant’s payment history in their credit file with no cost to either housing provider or renter – a win-win for both parties.

How does it help landlords?

As well as incorporating a tenant’s rental payment history in their credit report, with no cost to the agent, landlord or tenant, in a secure and compliant way, The Rental Exchange also reduces the prospects of late payments and allows private renters to build and improve their credit score.

Experian is currently the only UK credit reference agency to transform rental payment data into consumer credit reports, allowing them to highlight tenants who pay rent responsibly. If you know you have quality, reliable tenants in place, rent arrears or void periods won’t be a problem and the chances of a long-term, mutually beneficial tenancy are much higher.

The Rental Exchange also actively encourages on-time payments, with a greater incentive for tenants to pay their rent on time as payment history is highlighted on their credit report. For landlords, meanwhile, it means regular payments on time, a steady flow of cash and the chance to generate good returns on investment.

It also allows you to reduce risk when letting to tenants in the first place, by acting as a further vetting process of renters and their ability to pay the rent they owe. The Rental Exchange enables you to access unique data and information to examine a tenant’s risk profile – in other words, does their rental history suggest they are likely to reliably pay their rent on time and with no issues? This can help you to manage risk and increase your chances of occupying your rental homes with good, reliable tenants.

Furthermore, by providing tenants with the right tools to build and boost their credit history, you mark yourself out as a responsible landlord standing out from the crowd.

How does it work?

The Rental Exchange works through social housing providers, Build to Rent landlords and managing agents (such as Balgores Property Group) providing a regular feed of accurate and up-to-date payment data about tenants’ rent payment performance into the Rental Exchange.

This data can be seen by credit providers when the tenant applies for a product or service where a credit or identity check is completed through an organisation using Experian’s database.

When an application is made by a tenant, they are informed that a credit check will be made – in the same way as any consumer would when they go to buy certain financial products or services.

In turn, this enhanced view of repayment history will increase a lender’s ability to treat all customers fairly, allowing for more accurate lending decisions based on a more complete understanding of the financial situation of the individual, something which is increasingly required by regulators.

You can explore The Rental Exchange in greater detail using this Frequently Asked Questions PDF.

While The Rental Exchange has been set up to help those facing financial exclusion because of an information gap in their credit history – helping tenants to have one of their biggest monthly outlays recorded on their history in a secure, compliant way, in a manner in which it isn’t currently – it also offers significant advantages to landlords and the letting agents managing their property.

To find out more about our partnership with Experian, and our property management services in Essex, East London and Gravesend, you can call us on: 01268 271110.

Additionally, you can find out more about the various lettings services we offer at one of our many branches.

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