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Housing

The Big Issue’s Rental Exchange is already helping 1.2 million renters

Credit reference agency Experian’s Rental Exchange scheme, developed alongside Big Issue Invest, is levelling the playing field for renters. Now, Lord John Bird’s Creditworthiness Assessment Bill aims to force lenders to take notice

Rental payment data now appears on the credit reports of more than 1.2 million tenants from across the UK, thanks to an initiative inspired by Big Issue Invest.

Credit reference agency Experian developed the Rental Exchange alongside our social investment arm in 2010 in a bid to level the playing field for the UK’s 14.8 million renters. If a tenant kept up with the rental payments, that data was not recorded on their credit file, limiting their access to a mortgage or fair credit.

The Rental Exchange allows tenants to view their rental payments on Experian’s CreditExpert and statutory credit reports with more than 150 social housing providers, local authorities and letting agents reporting data in the initiative to date.

“We set out eight years ago with the aim of creating a fairer playing field for people accessing credit because we recognised that people in poverty were routinely penalised,” said John Montague, managing director, The Big Issue Group.

“The Rental Exchange has succeeded in making more inclusive data available to credit service providers, and it is this data which has the potential to reduce levels of financial and digital exclusion and improve the circumstances of some of the poorest in our society.”

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The Rental Exchange has already enabled 79 per cent of tenants to see a noticeable improvement in their credit score after lenders took into account rental data. The proportion of tenants who can prove their identity online has increased from 39 to 84 per cent.

Clive Lawson, managing director of Experian Consumer Services, said: “Adding rental payment data to credit reports would help millions of people prove their identity so they can access online services and mainstream finance. We’re already working with a range of lenders who want to use rental data to improve their understanding of a person’s financial situation so they can make higher quality decisions.”

The Rental Exchange inspired Big Issue founder Lord John Bird to take the fight for fair credit a step further with his Creditworthiness Assessment Bill.

The peer’s proposed legislation is currently awaiting a second reading in the House of Commons after receiving cross-party support during its passage through the Lords. The next step for Lord Bird to make rent count is in a roundtable parliamentary meeting on November 1 with Economic Secretary John Glen MP and lenders.

Lord Bird said: “Currently a history of meeting rent payments is not routinely recognised in people’s credit scores and is not commonly taken into account in credit service providers’ affordability assessments.

“As rent payments are usually a tenant’s largest monthly outgoing, they are a significant indicator of a borrower’s creditworthiness. It is right that a history of successfully paying rent should be recorded, recognised and taken into account.”

The Creditworthiness Assessment Bill’s co-sponsor Justine Greening MP, who is calling for the bill to pass through the Commons, asked Theresa May if the bill would feature in Monday’s Budget during Prime Minister’s Questions today.

However, May refused to confirm if Phillip Hammond’s statement will touch upon the bill and said: “Of course, I can’t say what will be in the Budget next week but she will notice that the Chancellor of the Exchequer will have heard the point that she has made”.

Image: Louise Haywood-Schiefer

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Bigger Issues need bigger solutions

Big Issue Group is creating new solutions through enterprise to unlock opportunities for the 14.5 million people living in poverty to earn, learn and thrive. Big Issue Group brings together our media and investment initiatives as well as a diverse and pioneering range of new solutions, all of which aim to dismantle poverty by creating opportunity. Learn how you can change lives today.

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