New scheme helps council tenants build up credit history

Tuesday, 27th October 2015

TENANTS living in Tamworth Borough Council-owned properties who regularly pay their rent on time can now benefit from a boost to their credit history, after the authority signed up to a nationwide project.

The Rental Exchange Scheme is a project run by the Big Issue and credit reference agency Experian, to help tenants improve their financial history and get better access to affordable, mainstream credit.

Currently, regular mortgage payments contribute to a person’s credit history, while rent payments do not. This means that even if a tenant always pays their rent on time and has no arrears, that is not reflected in their credit soore.

This means that council tenants are likely to have a lower credit score than homeowners, and consequently find it harder to borrow or are charged higher rates for credit.

Now, council tenants living in Tamworth will be able to have their rent payments count towards their credit history, after Tamworth Borough Council signed up to join the Rental Exchange Scheme.

The scheme is open to all housing organisations and local authorities with housing stock across the country to join. Data on rent payments will then be used to add to a tenant’s credit score, opening up better access to credit.

The scheme is likely to benefit more than 2,500 council tenants who have no significant arrears on their rent. A total of 2,697 tenants (61%) are in this position and would see their credit score improve by 45-55 points as a result of the rent date being incorporated.


Of these tenants, 352 (13%) would be able to access credit and services which were previously unavailable to them.

The extra information also acts as authentication and improves a person’s electronic identification. This gives tenants easier access to full banking services, as well as a range of non-financial public and private services.

There is no charge to either Tamworth Borough Council or tenants to join the Rental Exchange Scheme and tenants can opt out if they wish. Rental payment information will be kept secure and will not be shared with any third parties for marketing purposes.

All council tenants will be sent letters giving them the opportunity to opt out. They can also opt out at any time once the scheme is up and running.

The Council’s Cabinet agreed to sign up to the Rental Exchange Project at its meeting on Thursday.

Cllr Michelle Thurgood, Cabinet member for Housing & Waste Management, said: “This scheme will help our tenants to gain access to more sensible borrowing solutions and will help to prevent them turning to loan sharks and other expensive forms of credit, such as payday loans.

“It also encourages tenants to keep up to date with their rent payments. All tenants will be contacted directly and anyone who wishes to opt out of the scheme can do so. We believe that signing up to the Rental Exchange Scheme will be of huge benefit to most of our tenants. ”