What is the Rental Exchange scheme and how can it help improve my credit rating?

The Rental Exchange scheme is a new initiative which allows tenants to have their monthly rental payment recorded on their credit file.

This is a huge step forward for tenants, who until now, were not rewarded for consistently paying their rent on time. This is in contrast to homeowners, whose monthly mortgage payment is recorded on their credit file, improving their score with every successful payment. If you are able to make your rent payments on time then it is well worth signing up for this scheme; however, you should remember it works both ways – fall behind on your rent and your credit rating will be negatively affected.

At the moment this information only shows up on your Experian credit report, which is one of the three main credit reference agencies used by the majority of finance companies. Tenants have been able to sign up for this programme for the past two years; however, it is only now that this information will be used to update credit ratings. Experian estimate that 79% of those who have signed up to the scheme will be rewarded by a boost to their credit file once this information is

If you are currently renting but have hopes of purchasing your own property one day, demonstrating that you have consistently paid your rent on time, will hopefully lead to potential mortgage lenders having more confidence in your ability to handle this type of borrowing.

Improving your credit rating can be difficult without actually taking out credit in the first place. While some people have no problem using a credit card for small payments and paying these off at the end of the month, for others it is not always this easy or even something they feel comfortable doing. Having access to a credit card can prove to be too much of a temptation to some, while others may not have a good enough credit rating to be accepted for a card in the first place. For those in rental properties, the Rental Exchange scheme is a great way of boosting your score and proving your credit worthiness without getting into debt.