As a private renter, one of the major gripes I have is that even though I pay my rent every month, on time, and in full, the credit agencies have no record of this, meaning when I want to buy my own place, the mortgage companies can't take those payments into account, and even more, frustrating when they question my ability to pay a mortgage when I'm already paying way more a month renting than I would be spending on a mortgage!
I was discussing this with my partner. She mentioned she had heard about a service where your rent payments were reported to credit agencies, which would then help your credit score, so I investigated and came across CreditLadder.
So what is Creditladder?
CreditLadder reports your rent payments to Experian, Equifax and TransUnion, which can improve your Experian credit position and your Equifax and TransUnion credit scores, thus increasing the likelihood of being approved for products such as a mortgage, car finance, bank loan or a credit card.
CreditLadder ask you to confirm your tenancy details and then use an app to securely connect to your bank (Bank of Scotland, Barclays, Chelsea Building Society, Danske Bank, First Direct, Halifax, HSBC, Lloyds Bank, MBNA, Monzo, Nationwide, Natwest, Revolut, Royal Bank of Scotland, Santander, Starling Bank, Tesco Bank, Tide, Transferwise, TSB, Ulster Bank, Yorkshire Building Society), and this detects when you make a payment for your rent, and this is then reported to the credit agencies, which then shows a track record of payments and will inevitably boost your credit score.
It's a godsend for anyone renting that would like to boost their credit rating with the view of getting a place of their own in the future.
What does it cost?
CreditLadder offer both a free and paid service. The free service reports your rental payments to one credit agency only. You can choose either Experian, Equifax or TransUnion, but you can't change your choice once you decide.
The paid service is a better bet for anyone serious about improving their credit score. For £8 per month (or the equivalent of £5 per month if you pay annually rather than monthly), the app will report to Equifax, Experian and TransUnion, so your payments are then 'noticed' by the top 3 credit agencies, that lenders get their credit reports from, as most lenders work with more than one Credit Reference Agency making it worth every penny in my opinion!
Your rent payments will typically show up on your credit report in around eight weeks from when you sign up. You will be able to see this on credit monitoring services like ClearScore, TotallyMoney, Credit Karma, or your bank.
There are a couple of other similar services to CreditLadder, which I've listed below. However, they only report to Experian, meaning your rent payments may not be noticed by the people you need them to be seen by!
This scheme isn't a good idea to be involved in if you miss the occasional payment or are sometimes late paying, as this could negatively affect your credit file and rating, putting you further back in your credit building journey. If you pay on time and don't have payment 'blips', it's well worth considering!
You can find out more information on the CreditLadder website HERE
I don't receive any commission or incentives for mentioning this service; it's just a service I think is worth mentioning!