Experian & TPN partner on rental data
PUBLISHED 1 SEP 2014
Including rental history in credit files will enable greater financial inclusion, especially for those among South Africa’s under-banked population.
Experian has signed an exclusive partnership with TPN credit bureau, meaning that for the first time in South Africa, people who live in rented accommodation and pay their monthly rent on time, will see their positive payment behaviour being made accessible to participating credit providers, helping to open up access to more affordable credit.
Information about mortgage payments in South Africa is recorded on credit reports, enabling mortgage holders to build a positive credit history and gain access to more finance deals. Until now, people living in privately-rented properties who meet their rent payments on time have never seen this positive information included on their credit reports.
The partnership will provide Experian South Africa with access to a comprehensive rental payment database. Including rental history in credit files will enable greater financial inclusion, especially for those among South Africa’s under-banked population. The inclusion will allow consumers to build or rebuild good credit profiles by paying rent on time, enabling them to qualify for appropriate new leases or other financial products.
The partnership’s benefits include access to more affordable credit; the inclusion of rental-payment data will help strengthen an individual’s credit history, and aboost for first-timebuyers. This could provide a welcome boost to the credit histories of people looking to get onto the property ladder for the first time, as lenders will be able to more easily verify their full borrowing history.
This unique partnership offers a secure and compliant way to include a tenant’s payment history in their respective reports, strengthening their credit history and helping them qualify for more and lower-cost credit deals. This enhanced view of an individual’s repayment history will also improve the ability of lenders to treat customers fairly, with more accurate lending decisions based on a deeper understanding of their customers.
Michelle Beetar, Managing Director Experian South Africa, says this exclusive partnership will not only support their ongoing efforts to capture the total picture of a consumer’s payment record and give lenders in South Africa a better view of what a person can reasonably afford, but it will also play a valuable role in helping to tackle financial exclusion in this country. She says there are millions of people who struggle to access affordable credit because they are non-credit-active, cash-based consumers and, therefore, have a poor credit rating.
According to Beetar, the partnership between TPN and Experian South Africa to bring credit and rental data together is a ground-breaking win for people who rent and gives participating credit providers a more comprehensive view of their applicants so that they can make more responsible lending decisions. She says consumers and lenders in the UK and the US have already seen huge benefits thanks to similar partnerships Experian has undertaken there.
The proposed affordability guidelines mean that credit providers will be required to conduct a thorough assessment of a consumer’s affordability to determine their disposable income after servicing the necessary and statutory expenses, as well as their current credit agreements. Rental data will enhance the credit provider’s ability to determine the expenses in the affordability assessment, thus providing a clearer indication of the discretionary income.
The information will be shared based on a reciprocal relationship agreed between the participating credit provider, Experian and TPN, which means that TPN’s clients, the property managers, landlords and rental agencies will also gain a more accurate and complete picture of renters.
Michelle Dickens, Managing Director of TPN credit bureau, says TPN focuses on the collection of rental payment behaviour and this partnership with Experian will allow both credit providers and landlords to see a more complete picture of the consumer.