Missed rent payments could cost you a loan or mortgage
Late rent payments could appear on your credit file in the coming months, which could harm your chances of getting a mortgage, loan, credit card or tenancy agreement.
Credit reference agency Experian announced last March this information would appear on credit files by the end of 2012. It will now take effect from this spring.
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Missing a payment could cost you dear, but if you pay on time, it will boost your rating, as all rent payments will be recorded where a landlord signs up to the scheme.
Dan Plant, MoneySavingExpert.com web editor, says: "This adds to the ever-expanding pool of information firms can use to make a snap judgement about you, and it's not even about how you've previously borrowed money.
"This makes it absolutely crucial you pay rent on time, and regularly check credit files to make sure everything that's reported is true – and if not, get it put right."
Experian is one of three agencies that hold data on your past financial behaviour. Lenders and utility firms then use this data to assess how likely you are to pay back debt when you apply to them for credit.
The two other credit agencies, Callcredit and Equifax, are considering whether to share rent data.
Rent payments timetable
While landlords will start to record rent payments from the spring, it won't have an instant impact on your chances of getting credit elsewhere.
This is because the information will not be available to banks, building societies, utility firms and other landlords from the outset.
Experian says this will take "a little while".
Which landlords will record rent payments?
Experian is in discussions with major letting agents and landlords to sign them up. It is likely only larger firms will take part, so rent payments to a small landlord with one or just a handful of properties probably won't appear.
Direct consent will be required for rent history to appear on your credit file. This will usually be stated on the tenancy agreement, which you must sign.
Landlords that share your rent history will also be able to access new tenants' credit files so they can judge their likelihood of paying rent on time. However, they will only be able to see your rental history, not your full credit history.
James Jones, from Experian, says: "For the first time in the UK, several million people living in privately-rented properties will be able to strengthen their credit histories by registering details about their rent agreements with Experian."
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