Renting a property is becoming more and more popular. Especially since buying a property is becoming something that appears to be harder and harder for some people to do. Whilst there are plenty of reasons why renting is ideal for both landlords and for tenants, there are also a few ways that it is less than perfect.
That is, how it is linked to a credit rating. However, things are set to change and credit agency Experian are leading this. They have set out an initiative that means that the rental payments that tenants pay on a monthly basis are going to be included in their credit report.
But what does this mean for those who rent properties as well as the landlords that they rent from?
What does this mean for landlords?
The great thing about this particular initiative is that it has benefits for both renters and landlords alike. For landlords it gives them a great chance to find a tenant that is going to be quality. That will ensure that their rent is paid and that the property that they live in is looked after.
Of course, there are already checks in place that are supposed to help with this part of the process, but it seems that this is always working.
Another way that this change could help landlords is because it is going to encourage tenants to pay their rent on time and in full, else they could have an impact on their credit rating in the long term.
What about tenants?
So, we know the benefits that this is going to have for landlords, but what about tenants?
Of course, if you are the type of tenant who hopes to get away with a few missed rent payments, then this isn’t going to be necessarily welcomed by you. Especially since it will mean that you have a black mark against your name.
However, for those that make an effort to pay on time, then they will see the benefit in their credit records improving.
Not only this, but by having this on record, you have something to show another prospective landlord. Which greatly improves your chances of securing another property in the future.
There is even a hope that this particular approach is going to improve the chances of those who are renting being able to take out a mortgage in the future and actually taking the steps to buying a property for themselves.
The idea behind this initiative is still in its infancy and we are yet to see the impact that it has on the world of renting. One thing is for sure, it seems that there is going to be benefits for both the tenants and the landlords when it comes to renting out a property.