Online rental payments platform CreditLadder says it is the first in its sector to launch an Open Banking service that enables tenants to improve their credit score without the need for a lengthy sign-up service or their landlords’ permission.
These restrictions were a key criticism of the tech sector by Lord Bird when he launched his draft Creditworthiness Assesssment Bill recently in the House of Lords.
CreditLadder says it has already processed rental payments worth £14 million since starting up in 2016 and claims to be the first service of its kind in the UK to integrate its tech with the Open Banking ‘revolution’.
Nine banks in the UK now offer an Open Banking feed or API that enables third parties such as CreditLadder to plug into and read the amount and date of transaction going into people’s bank accounts, if they give permission.
The nine banks offering this so far are Barclays, HSBC, Lloyds Bank, Halifax, Natwest, RBS, Santander, Nationwide, The Co-Operative Bank, First Direct and TSB.
Individual tenants can sign up to the service, but it is also open to letting agents to offer tenants as an ‘add-on’ to their lettings proposition.
CreditLadder records rent payments being made to a landlord by a tenant and then passes the data to partner credit reference agency Experian, which in turn adds it to the tenant’s credit history.
This can help tenants to access more affordable mortgages and other types of credit including cards, loans and mobile phone contracts at more attractive interest rates.
The CreditLadder rent reporting service is free to use by tenants. But it also offers discounts on high street shopping, cinema and restaurants, mobile phone insurance plus a free monthly movie and coffee every month to those who sign up to one of their two paid plans.
“In the past it has been necessary for both tenants and landlords to complete permission forms to enable tenants to register their rental payments with a credit reference agency,” says Sheraz Dar, CEO of CreditLadder.co.uk.
“But now a tenant can instead log onto CreditLadder, connect with their bank and permit us to read their statement. This then allows rent reporting to the Credit Agencies without CreditLadder handling the rent payments.”