Moneyhub has launched a new feature that allows rent payments to show up on credit scores, helping renters who want to buy a home.
The payments app says its ‘rent recognition’ software allows renters to “demonstrate they can be trusted to meet financial commitments on time and can help to improve the credit score of young people or anyone with a patchy or non-existent credit history”.
The fintech says its tool lets users send anonymized details of rent payments to credit reference agencies such as Experian, offering alternative credit data which can build credit scores.
Lenders check credit scores when assessing mortgage applications.
Moneyhub says its rent payments software only shares the minimum amount of relevant data that will contribute to credit scores, which protects a user’s privacy.
The tech firm has also introduced a new ‘regular recurring transactions summary’ feature, which builds on its existing ‘spending analysis’ tool by showing details of scheduled payments.
It says: “The extra visibility granted by this update will help users reduce cash leakage and control their finances to work towards goals such as paying off debts or saving for a mortgage deposit.”
Moneyhub chief operating officer Dan Scholey adds: “Enterprise clients who power their own apps with Moneyhub can now give their own users the ability to safely and anonymously provide details of rental payments to leading credit reference agencies.
“Consumers who use the Moneyhub app will also benefit from the same ability.
“Financial inclusion is a critically important issue which can seem like an intimidating or difficult problem to address.
“But we can start opening up the benefits of financial services to millions of people simply by allowing them to share information about the rent they pay every month.
“This small step can make a big difference in many people’s lives.”
There are 5.8 million people in the UK who are financially ‘invisible’ due to thin or non-existent credit scores, according to a 2018 report from Experian. It adds that these people find it difficult to access credit and are often forced to pay more for basic services such as lending and utilities.
