Business

'Rental Exchange' gives Housing Executive customers credit where credit’s due

The Housing Executive initiative is helping people with difficulties getting credit
The Housing Executive initiative is helping people with difficulties getting credit The Housing Executive initiative is helping people with difficulties getting credit

IT'S well recognised that people on low incomes may pay a premium for essential goods and services such as utilities. This is especially true for credit and other financial services, where low income households who need access to credit or borrowing services are excluded from affordable, mainstream products because they don’t have the opportunity to build the necessary credit profile that makes them attractive customers to the high street financial institutions. This may result in the use of credit and loan products with high interest rates, ultimately worsening their financial situation in the longer term.

But as a responsible social landlord, we want to help our customers to overcome the barriers they face to accessing more affordable goods and services. This has led us to team up with Big Issue Invest (the social investment arm of the Big Issue) and Experian, the UK’s largest credit reference agency, to participate in an exciting initiative called the 'Rental Exchange'.

It is based on a simple premise – social landlords sharing customers’ rent payment information with Experian in the same way banks share mortgage payment information so a person can build a positive credit score. The vast majority of our customers pay their rent on time and we believe they should have the same opportunity to have this recognised and therefore benefit from increased access to a wide range of more affordable goods and services; from bank accounts, credit cards and loans to utilities, mobile phone contracts, insurance and online shopping.

There is an added advantage in sharing rent payment information with Experian as it also helps our customers’ to prove their identity and their address electronically – a requirement for access to many online goods and services these days.

Prior to deciding to participate in this initiative we satisfied ourselves that the vast majority of our customers will benefit from having their rent information shared. For customers who have rent arrears, we will continue to work with them to help them address their arrears and move to a position where they can also start to improve their credit profile and score. However, if a customer is having trouble paying their rent, it is unlikely they are suitable for a loan or other payment agreement at that time. Therefore the Rental Exchange will help to support responsible borrowing and lending and help people avoid becoming over-indebted.

The NI Housing Executive is excited to work with the Rental Exchange and providing our customers with the ability to build a positive credit profile. By simply having rent paid on time acknowledged they will be able to access a whole host of more affordable goods and financial services. We consider it a significant and important step towards creating a level playing field between our social housing tenants and private renters/homeowners.”

:: Jennifer Hawthorne is head of communities and income collection at the Northern Ireland Housing Executive (www.nihe.gov.uk).