Rental Exchange Get recognised for paying your rent on time

Get recognised for paying your rent on time.

LHP, Big Issue Invest (BII) and Experian have partnered to tackle the financial, digital and social exclusion challenges faced by many social housing tenants in the UK.

We believe that social tenants should get recognition for paying their rent, the same way people who pay their mortgage do. So we’ve teamed up with Big Issue Invest and Experian to bring you - The Rental Exchange.

This scheme involves us sharing tenant’s rental payment history with Experian on a monthly basis. This is then included in your credit report, meaning you will then be recognised for paying your rent on time.

Currently this scheme is only available to our customers in the north.

Why offer this service?

Many social housing tenants find it difficult to access financial services such as affordable loans, bank accounts and credit cards. They are more likely to be declined or pay a higher price for credit and other basic goods and services. Often this is because not enough information is held on their ‘credit file’.

A ‘credit file’ or ‘score’ is a personal history of the credit you have had. This can help you access a range of goods and services online, including getting better deals on mobile phones, TV, broadband packages and car insurance. Having a good credit history also helps to provide proof of your identity and where you live and have lived before.

Not having a credit score means that you may get worse rates for services and can end up paying more for things like electricity and loans.

How is my credit file used?

In summary, sharing your tenancy record through the Rental Exchange Scheme not only allows us to work with you more closely to manage your existing tenancy agreement, but will also enable Experian to use the information supplied to them in the future to assist other landlords and organisations to:

  • assess and manage any new tenancy agreements you may enter into
  • assess how strong your financial standing is for suitable products and services
  • manage any accounts that you may already hold, for example reviewing suitable products or adjusting your current product in light of your current circumstances
  • contact you in relation to any other accounts you may have and recovering debts that you may owe
  • verify your identity and address to help them make decisions about services they offer
  • help prevent crime, fraud and any money laundering

We, and Experian, will make sure that your information is treating in accordance with the Data Protection Act so you can have peace of mind that it will be kept secure and confidential and your information will not be used for marketing purposes.

What should I do if I do not want to be included?

This scheme is currently only available to our customers in the north. If you are a LHP northern customer and do not want us to share your tenancy information with Experian, please let us know. You can opt out by completing this form, when doing so you will have to quote your unique reference number found at the top of the letter sent to you.

Please note that if you are joint tenants you should both agree your preference together given you have a joint responsibility under your tenancy agreement for your rent.

Where can I find out more information?

For more details about The Rental Exchange visit Experian website or you can:

How can I view my credit report?

A statutory credit report is available which shows your credit history. It contains public and private information recorded in your name and is available to authorised lenders that carry out credit checks. You can obtain a copy from Experian or from other credit agencies like Noddle, Callcredit and Equifax. Please note that the Experian report is the only one where your rent payments will contribute to your credit score, because they are the only agency we are sharing this information with.

 

  • What is the Rental Exchange?

    The Rental Exchange is a ‘ring-fenced’ secure database which holds rental payment information. It has been discussed with the Information Commissioner’s Office to make sure it complies with the letter and spirit of the Data Protection Act 1998 and the European Union General Data Protection Regulations 2016/679. The information allows tenants with a ‘thin file’ - a history of little or no credit - to build a credit score.

    The database can be accessed by lenders and other service providers when a tenant applies for a loan or service that requires a credit check or proof of identity, something that is becoming common-place for both private and public sector transactions.

  • Why has it been set up?

    Millions of social housing tenants in the UK can face financial, digital and social exclusion. One major cause of this is an information gap in their credit history which can exclude low-income people from affordable credit. They are more likely to be declined or pay a higher price for credit and other basic goods and services.

    Addressing this has been a key agenda for BII (Big Issue Invest) and a number of like-minded organisations for several years. The Rental Exchange supports BII’s mission is to give people ‘a hand up, not a hand out’.

  • What is a credit file and why is it important?

    Anyone who is over 18 and has ever taken out credit is likely to have a credit report, held by a Credit Reference Agency. Experian is the UK’s leading CRA. It’s a personal history of the credit an individual has had, including mortgages, credit cards and even mobile phone contracts or utility bills. If you want to buy something on credit it helps considerably if you have a good credit history (a track record of paying off credit agreements). Companies use credit history to assess your creditworthiness before making a lending decision.

    Many social housing tenants can have a ‘thin file’. This means there is very little information about an individual’s financial history or circumstances - making it hard to prove identity or reliability as a payer and access benefits and services that mainstream society has come to regard as ‘the norm’. The Rental Exchange opens up new channels and services to social housing tenants, giving fairer access without the time-consuming need to provide paper-based evidence of identity or financial commitments.

    For more information on what a credit report is and what sort of information is on there, visit the Experian website.

  • Why is LHP taking part in the project?

    We are taking part in this project for one reason and one reason only, we believe that the majority of our tenants will be better off if we take part in this scheme. Tenants will be able to save money on basic goods and services such as white goods, utilities, mobile phone contracts and insurance.

    The Rental Exchange Initial Research Papers and Rental Exchange White Paper provide further information.

    The Joseph Rowntree cost of living study states average premium paid by the poorest people for services is £1300 per annum, this is through rates, interest, contract pricing etc, because the less information an organisation has on an individual the higher the perceived risk would be and therefore an organisation may charge more.

  • Are all LHP customers included in the scheme?

    No – only our northern customers currently take part in the scheme. Northern customers who have chosen to opt-out of the scheme are not included.

  • Who benefits from it?

    The Rental Exchange focuses on supporting tenants in social housing, where the need is greatest.

  • How does it work?

    While information about mortgage payments is included on credit reports, rent payment information currently isn’t. This means that tenants who make their rent payments on time are unable to have this positive information registered on their credit report. The more positive information on a credit report, the more likely an individual is to access credit, goods and services, and be able to prove their identity. A person’s address is the first step in proving they are who they say they are.

    LHP provide a regular feed of required and actual payment data about tenants’ rent payment performance into the Rental Exchange. The Rental Exchange offer a secure and compliant way to include a tenant’s payment history in their credit file, strengthening their credit history and helping them qualify for more and lower-cost payment plans. The data is only accessed when the tenant applies for goods or services where a credit or identity check is made through an organisation using Experian’s database. Please note that non-payment of rent may have a negative impact on the credit score.

    Experian processes significantly more transactions of this kind in the UK than any other organisation, giving the tenant the best chance of their data being available to support their application. When the tenant makes an application they are notified that such a check will be made, as would any consumer when they go to purchase certain goods or services. For example, this extends to tenants having the option of better tariffs on their utilities’ bill based on their credit file. This enhanced view of repayment history will improve the ability of lenders to treat all customers fairly, with more accurate lending decisions based on a deeper understanding of the individual, as is increasingly required by regulators.

  • How does it benefit tenants?

    The Rental Exchange enables tenants to build a positive credit history and ‘online’ proof of identity - increasingly important when applying, for example, for goods and services such as, a utility supplier, a mobile ‘phone provider or when online shopping.

  • What about the General Data Protection Regulations (GDPR)?

    Experian have been in discussion with the Information Commissioner’s Office (ICO) to make sure sharing of rental payments is fully compliant and fair to the tenant. The unequivocal benefit to tenants is recognised in the General Data Protection Regulations ‘legitimate interests’ provisions. The Rental Exchange is based on protecting tenants’ data while at the same time enabling them to make sure organisations can use this data to support their application.

    The ICO recognise that tackling social, financial and digital exclusion issues through enabling tenants to use their information in a way that helps them is not something that should be prevented by the GDPR, subject to tenants being provided with a very clear explanation of how this will benefit them.

    The GDPR requires an appropriate processing condition to be satisfied in order for any data processing to occur. The GDPR identify six equally valid processing conditions in total. The processing condition that most people are aware of is consent, but consent is often very difficult to achieve and therefore should not be looked at as the only basis for legitimate sharing and processing of data.

    In discussions with the ICO regarding the Rental Exchange, it was agreed that the appropriate processing condition for Rental Exchange was the ‘legitimate interests’ condition.

    Two requirements need to be satisfied for this condition to apply;

    1. The processing must be necessary for the legitimate interests of the housing provider and
    2. These interests must be balanced against the interests of the tenant. If the processing is prejudicial to the rights, freedoms or legitimate interests of the tenant then it is likely the requirements of this condition will not be met.

    In the context of the Rental Exchange, there is no doubt the processing of tenant data is necessary for the legitimate interests of the housing provider. Furthermore given the clear and tangible advantages to tenants resulting from the sharing of their data into the Rental Exchange, it could not be considered to be harmful to their interests either. There is no intention or desire to share data into the Rental Exchange on any tenant who objects; should this occur the housing provider should inform the tenant of the advantages of sharing and if the tenant still objects, they must comply with the wishes of the tenant.

    In practice, it is worth noting that Credit Reference Agencies typically rely on the ‘legitimate interests’ condition when sharing data across sectors (e.g. financial services; telecommunications; utilities etc). This is because consent (as expected under the GDPR) can be so difficult to achieve and often undesirable given it can be withdrawn at any time, therefore having significant impacts on the credit referencing model. Therefore there is strong evidence to support the use of ‘Legitimate Interests’.

    Guidance for you on Data Protection implications can be found on the Experian website.

    Further information on the Rental Exchange and GDPR can also be found on the website.

    More information on how LHP use your information, including for the Rental Exchange, can be found in our Privacy Policy.

  • What is the process for dealing with data disputes?

    We will help tenants resolve any disputes in the same way we do for other types of data. The moment a tenant contacts us or Experian to report a problem, Experian mark the data as under dispute while it is investigated. This means that any organisation looking at this data must make further enquiries to ensure any decisions they make reflects the tenant is disputing the accuracy of this information. This is consistent with the requirements of the General Data Protection Regulations.

    Further information on disputes for tenants on their credit reports is available on the Experian website.

  • Is data shared with third parties for marketing purposes?

    No – we do not share any personal data with any third parties for marketing purposes. The information used for credit referencing is held entirely separately from marketing data.

  • Which social housing providers are involved?

    A proof of concept study using anonymised rental data from two large housing associations showed the Rental Exchange could potentially benefit over 1.5 million tenants in terms of demonstrating their financial reliability and identity so enabling better access to banking services, lower cost credit and other services, such as utilities.

    Experian is working with 200 other housing organisations across the UK.

  • Will my credit score be affected if I do not keep my rent payments up to date?

    If you miss making a rent payment and you fall into more than two months of rent arrears then this may have a negative impact on your credit score.

  • Will missed rent payments stop people accessing affordable credit or renting a home?

    For the majority of people it’s the opposite, as it will help prove that they meet this regular and important financial commitment. Most lenders will ask a consumer about their outgoings to understand their situation but in the case of social tenants, lenders and tenants are currently unable to verify commitments and performance history without going back to their social housing provider. So in effect the lender and tenant can now benefit from real-time transactions on accurate, objective information. This will support more responsible borrowing and lending and help people avoid becoming over-indebted.

    If a tenant is unable to pay their rent, it is unlikely they are suitable for a loan or other payment agreement. For social housing providers like LHP, it will help identify those tenants who are financially vulnerable and enable us to provide appropriate assistance help get them ‘back on track’.

     

  • If my rent, or part rent, is paid for by the government, will my credit history be affected if my payment is late through no fault of my own?

    No – benefit payments (including varying payment dates) will be noted and consideration given to late payments.

  • Do I have a right to access my credit information?

    By law, you can write to any of the credit reference agencies and ask for a copy of your credit reference file. Further information can be found in the Information Commissioner’s Office Credit Explained’ leaflet, which includes a sample request letter on page 11.

    Please note that Experian are the only credit reference agency who will show your rent payment data because they are the only company involved in the Rental Exchange scheme. Details showing instructions on how to obtain a credit report from them can be found here.

  • Can I be excluded from the scheme and will this affect my credit score?

    If you decide you want to opt-out of the scheme complete this form.

    Once you opt-out your previously shared records will be not be deleted. If you feel your records should be deleted you should contact us with the reason why. By deleting your credit report will reflect as though no rental records were ever used and therefore revert back to how it would be if you had never joined.

    The deletion of the record itself will not have a negative impact on the report (meaning this won’t flag as a ‘something has been deleted’). However, there may be an impact, which will be dependent on other information on your credit file. For example, if a tenant only has on their credit report a bank account and rental data and no other form of ‘proof of address’, then after opting out their credit report will now only show one form of this identification (bank account) and this may result in a negative impact on their score.

  • If I decide to opt-out, can I opt back in at a later date?

    Yes - just contact us to let us know.

    You can choose to opt back in at a later date but this will show a gap (or question mark) on your credit file. In the future, when lenders start to review this data in more detail, having gaps may raise questions as it doesn't look favourable. This won't impact your credit history/score though, it will just show as gap on your file.

  • Are there any other ways I can increase my credit score?

    There are other ways of increasing your credit score. Most people improve their credit score by taking out a loan, applying for a store credit card or buying something on credit and then paying it off. The Rental Exchange is unique as it is the only way of improving your credit rating without having to take on any additional debt.

    Further information on how to improve your credit score can be found on the money advice service website.

  • Do LHP ever reject a housing application because of a poor credit score?

    A poor credit score would never be used to reject a housing application. As some point in the future we may use data held by credit checking agencies to access if new tenants might need extra support and guidance. The aim would be to stop tenants getting into problems rather than waiting until they get into debt. As resources across the public sector get squeezed more and more in the future, this may be a way of making sure we focus our resources in places where they can add the most value.

  • Will my data be kept securely by LHP and Experian?

    Yes - we have measures in place to transfer and keep your data securely, please find further guidance in Experian’s Information Security Controls.

  • What is the relationship between Experian and LHP and why we are only sharing information with them?

    There is no financial benefit to LHP by being involved in Rental Exchange; our reason for joining is because of the benefits we see for our customers.

    The reason we are only working with Experian is because they are the only credit agency which is accepting rent payment information towards a person’s credit score.

  • What is the relationship between Experian and B11?

    The innovative concept of sharing rental data to enable social housing tenants’ better access to credit and mainstream services was developed by BII several years ago. BII initiated a competitive and transparent tender process for a partner to create and responsibly manage the Rental Exchange for the better of society.

    Experian was selected in 2012 as the preferred supplier. As well as being the leading global information service’s company, providing data and analytical tools to clients around the world, Experian has a long history of corporate social responsibility. Click here to find out more.

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