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Will my renting history affect my mortgage application?

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Jan 8, 2023

Emma Lunn

Fact Checked By:
Emma Lunn - Finance Editor

Will paying my rent on time help me get a mortgage?

Most people rent privately before buying their own home and hope it will help them when they get a mortgage.

Many first-time buyers will have paid rent for several years before applying for a mortgage, but many won’t fully understand whether rent payments show on your credit report or affect your mortgage application.

If you want to know if this affects you, start your application online now to see quickly:

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Is your credit report showing rental payments?

Your landlord can record your rental payments and send them to credit reference agencies.

Several landlords and letting agencies have signed up for rent reporting initiatives, such as The Rental Exchange Scheme.

This records all data, including late payments and arrears. Experian launched the Rental Exchange Scheme in 2016 to help private tenants improve their credit scores and pay their rent on time. Late rental payments impact your credit file.

However, most private landlords won’t report your positive history of rent payments with a credit reference agency.

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What is the Rental Exchange Scheme?

Instead of paying rent directly to your landlord, you pay it to Credit Ladder. Credit Ladder pays your landlord and then passes on proof of rent payments to Experian. Experian updates your credit file to indicate if the payment was timely or late.

You can improve your credit score by paying rent on time as with most credit, but you should ask your landlord if they do send your information to a credit reference agency to be fully sure.

Landlords sign up for the Rental Exchange Scheme as it makes tenants more likely to pay their rent on time in order to to avoid any negative credit impact.

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Will late rent payments affect my credit score?

If your landlord is signed up to the Rental Exchange Scheme or any other similar scheme, late rent payments will hurt your credit score.

But if your landlord doesn’t report your rent payments, late payments won’t affect your score.

However, if you don’t pay your rent, your landlord might take you to court to get the money owed. If you get a County Court Judgment against your name, this will impact your credit score.

Talk to an advisor for expert advice at Loan Corp. All lenders are regulated by the Financial Conduct Authority.

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