Credit Rating - Tenants have little understanding of how it works

Many private renters are misguided on what actually contributes to their credit score and thus may not be taking the correct measures to improve it, a lettings industry PropTech firm claims. 

Vetting and rent tracking service Canopy says its research shows that 41 per cent of private renters believe having a regular salary impacts their credit score, when in fact, it has no bearing on it whatsoever, while 38 per cent also believe having a job does too. 

Other factors that private renters believed impacted their credit score are, staying with the same bank (27 per cent) and even switching banks (15 per cent). Some six per cent believe having children contributes, with four per cent also believing lending money to a friend can affect their score.

Three per cent of renters even thought owning a pet would impact their credit score - while 27 per cent of private renters are totally unaware of what their credit score is. 

There is a clear agreement from the majority of private renters though as 70 per cent, who have always paid their rent on time, believe their rental payments should count towards their credit score, while 35 per cent believe it already does. 

Canopy chief executive Chris Hutchinson says: “Getting on the property ladder is an incredibly competitive endeavour and one which potential homeowners will need to be as financially fit as possible for. Raising the necessary funds for a deposit, while improving financial wellness can be a difficult task, which is why giving renters a helping hand by ensuring their rental payments work towards improving their credit score can be so important.”