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The Rental Exchange

Innovating to tackle financial, social and digital exclusion

The Rental Exchange will add social housing rent payment data to traditional credit scoring models as a way of tackling financial, social and digital exclusion. It levels the playing field for tenants with social housing landlords, treating rent payments as contributing to a credit history in the same way as mortgage payments do for homeowners.

The Rental Exchange was developed on the back of three years proof of concept research, funded by the Friends Provident Foundation, which led to a report entitled The impact of social housing rent-payment data on credit scoring (Dec 2010, Sarah Forster and George Wilkinson). Click here for more information.

A case of Catch 22

We found that there are millions of low-income people who are excluded from affordable credit due to the lack of a mainstream credit history. Since they have no credit history, they are more likely to be declined or pay a higher price for credit. This, in turn, contributes to keeping them in the poverty trap and dependent on very high cost credit leading to a vicious cycle.

The proof of concept study found that rent payment history data could boost tenants’ credit scores and so improve credit decisions, particularly for those with no or a limited credit history. The analysis also found that rent data would help social tenants build an online proof of identity which is becoming increasingly important when applying to a utility supplier, mobile phone provider and for on-line shopping.

The tenants’ perspective

Before shifting to live implementation, we commissioned independent research consultancy Policis to assess the initiative from the tenants’ perspective. This report entitled, The impact of social housing rent-payment data on credit scoring. The tenants’ perspective’ found that the majority of social tenants were supportive of rental data sharing with support highest amongst the young, credit users, workers and families.

Tenants see the main benefits as proof of their financial reliability, access to cheaper credit and automated evidence of ID and proof of address.

For future information contact the Managing Director of Big Issue Invest. John Montague on john@bigissueinvest.com.