How To Boost Your Credit Score With Rental Payments
Your credit score is one of the most important pieces of information about you. By getting your rental payments recorded, could be improved by something hidden in plain sight.
Credit scores are sometimes a tricky thing to understand. Different agencies have different methodologies, and ultimately when it comes to applying for financial products, the process by which firms assess you is very opaque.
If you want to do fairly minor things like get a new phone on a contract, or bigger stuff like credit cards – to the biggest of them all, mortgages – then you’ll need a robust credit score with a good payment history.
Give your credit score a boost
There are some very simple ways to improve your score too. Those are:
•Make sure you’re on the electoral roll
•Make sure you have the correct address listed on your financial products such as bank accounts and credit cards
•Have some form of credit card with a payment history (you can end up with a bad score if you have no credit history at all!)
•Make sure you pay off your card in full each month, or at least make sure you never miss minimum payments
Beyond these straightforward tips though, there is a newer, more interesting way for you to give your score a boost – rent reporting.
For many of us, the ultimate goal for obtaining a good credit score is to be accepted for a mortgage. This is the biggest financial commitment most of us will make in our lives. For that reason, banks are very prescriptive about what they’ll look at.
What is strange though is typically rent, generally the single largest expense for those of us without mortgages, goes unreported on credit histories. You could have years of never missing large rental payments and it counts for nothing.
Take advantage of rent reporting platforms
That is now changing though. New companies which use Open Banking are stepping up and help people get their rent reported on credit scores. While it is not a certainty, this can have a significant positive effect on your rating, as long as you pay rent in full every month.
So which companies are out there to choose from?
1. The Rental Exchange: This is a service provided by Experian, one of the major credit referencing agencies. Landlords can sign up for it, then you’ll get your rent reported each month for your credit file. If they’re not on the scheme, get in touch to ask if they’ll participate.
2. Credit Ladder: This one is better if you want to self-report and don’t want to rely on your landlord. CreditLadder can report to multiple credit agencies but you’ll have to pay £8 a month if you want the company to report your rental payments to agencies other than Experian.
3. Canopy: Similar to Credit Ladder but it will only report to Experian. It is free to use.
Finally, remember that while these are excellent tools to improve your credit score – if you don’t make your rental payments on time it will do the opposite, i.e. harm it. Make sure you make all your payments on time each month and you’ll be on your way to a better credit history.