Council could adopt scheme which would improve tenants credit score if they pay rent on time
Councillors in Flintshire are set to discuss whether to back a proposal which would see council tenants improve their credit score if they pay rent on time.
A national scheme called ‘Rental Exchange’ is being adopted by an increasing number of social landlords, it helps tenants build a good credit score by taking into account the rental payment history on their credit file.
It means more ready access to credit, for things as simple as white goods, so borrowers won’t be forced towards rapacious lenders.
Cllr Andy Dunbobbin, who represents Connah’s Quay Golftyn, submitted the motion for the council to consider the introduction of the service which could benefit up to 7500 tenants in Flintshire, He said:
“The failure of the current housing system is widespread. The social and economic inequalities caused by the private rented sector is worryingly acute.
The vulnerable and those on low incomes are significantly disadvantaged. Poverty among renters has roughly doubled in the last decade, leaving thousands of people trapped in insecure, expensive housing.”
Cllr Dunbobbin added: “Credit ratings really matter when our residents try to access loans or other sources of financial support such as mortgages because without a good record they face more expensive borrowing costs or worse still are forced to rely upon unscrupulous lenders.
It has also come to my attention that Council tenants who pay rent on time do not to have their payments recognised on their credit reference report.
There is an inequality here because those who have a mortgaged property and make that payment on time, see it reflected on their credit file. This is simply not fair.”
It’s estimated six million people are unable to access mainstream credit in the UK, leading them to borrow from unscrupulous lenders and worsening their financial exclusion.
Cllr Dunbobbin said: “By participating in the service and working with credit reference agencies, the Council would be able to offer tenants the opportunity to build a positive credit history and also be rewarded for paying their rent on time.
I believe it also has major benefits for things like applying for goods and services, including responsible and affordable financial services, online shopping or even helping a tenant who wants to apply for a mortgage as part of a transition into buying their own home.”
The motion is set to be discussed at a full council meeting next week.
