Ainsley BiltonWith our rent reporting feature, we have been able to help thousands of Emma users build their credit history each month. We are excited to now be able to extend our rent reporting functionality to TransUnion so your rent payments will be reported to all three major credit bureaus in the UK!
What is Rent Reporting?
Rent reporting is the process of having your rent payments reported to credit bureaus. This can help you build your credit history and improve your credit score!
Traditionally, rent payments have not been reported to credit bureaus. This is because landlords are not required to report rent payments, and many do not do so. As a result, many renters have no credit history, or a limited credit history, which can make it difficult to qualify for loans, credit cards, and other forms of credit.
Why is Rent Reporting Important?
There are several benefits to rent reporting. First, it can help you build your credit history. A good credit history is important for qualifying for loans, credit cards, and other forms of credit. Second, rent reporting can help you improve your credit score.
A higher credit score can save you money on interest rates and fees. Third, rent reporting can make you a more attractive borrower to lenders. Lenders are more likely to approve you for a loan if you have a good credit history and a high credit score.
Here are some of the benefits of rent reporting in more detail:
- Build your credit history: As mentioned above, rent payments have traditionally not been reported to credit bureaus. This means that many renters have no credit history, or a limited credit history, which can make it difficult to qualify for loans, credit cards, and other forms of credit. Rent reporting can help you build your credit history by having your rent payments reported to credit bureaus each month.
- Improve your credit position: A good credit score is important for qualifying for loans, credit cards, and other forms of credit. It can also help you get lower interest rates on loans and credit cards. Rent reporting can help you improve your credit score by showing lenders that you are a responsible borrower who pays your bills on time.
- Make you a more attractive borrower to lenders: Lenders are more likely to approve you for a loan if you have a good credit history and a high credit position. Rent reporting can help you achieve this by showing lenders that you are a responsible borrower who pays your rent on time.
What are the top 3 Credit Agencies in the Uk?
There are three main credit agencies in the UK and those are Experian, Equifax, and Transunion. These three companies each acquire financial records from different institutions and compile a person’s credit score accordingly.
For the most part, they each do the same thing but there can be differences in the institutions that report to each which can result in a different score from each. Let’s break down a little more about each of the agencies.
Experian
Experian is the most popular credit agency and is often seen as the most trusted credit rating in the UK. They break down their credit reports based on personal information, employment, accounts (including credit cards, loans & mortgages), and inquiries.
Experian provides this data monthly for each account as well as how long each account will stay on the report. Typically any transgressions such as a missed payment will stay on someone’s credit report for at least 6 years. Consumers can add personal notes to their accounts to explain any potentially damaging entries like a missed payment.
Equifax
Equifax sets up its credit reports a little differently. They first group accounts into an open or closed list which makes it easy to see current vs old credit. Equifax operates on an 81-month credit history system meaning they look at 7 years worth of transactions.
Equifax breaks down its report between revolving accounts (i.e. credit cards & charge cards), mortgages, instalment loans, & other accounts like those from a debt collection agency. Like Experian, you can add a consumer statement to your credit report. Experian also includes additional personal history, inquiries from potential creditors, public records, and collections agencies.
Transunion
Transunion creates its score based on the VantageScore 3.0 score system. This system takes into account your payment history for 40% of your score, and credit utilization for 20%. The length of your credit history contributes to 21%, and the total amount of recently reported balances makes up 11%. The remainder comes from new credit accounts which are responsible for 5% and your available credit makes up 3%
Why is it important to report to multiple agencies?
It is important to have your creditworthiness reported to each of the major institutions as the stronger your credit score, the more benefits you will receive. Whether that be getting a lower rate on a personal loan, or a larger mortgage it is important to have a good credit score available to institutions that will check across different credit bureaus.
With the addition of TransUnion, Emma is now able to report your rent to the top 3 major credit bureaus in the UK! It is incredibly important to report to multiple credit agencies in order to reap the rewards of rent reporting which is why we are so excited to add TransUnion to our rent reporting feature.
Rent reporting is a unique way to improve your credit position without having to take out credit card debt or loans like the traditional methods of building credit.
Download the Emma app today to get started with rent reporting with TransUnion, Experian and Equifax to improve your credit position!
