A scheme aimed at tackling financial and social exclusion amongst private renters has been launched. CreditLadder in association with Experian’s Rental Exchange programme , seeks to boost a tenant’s credit rating by recording their rent payments on their credit file.

This means millions of tenants throughout the UK are now able to build their credit score, the aim of the scheme to help the renter make the transition from tenant to homeowner.

CreditLadder’s Director, Asa Bentley said:“The Rental Exchange was conceived as an idea to help tenants in social housing. But at Credit Ladder, we wanted to bring the same benefits to the private rented sector. We are delighted to be the first to offer this service to private tenants, which will allow them to gain credit and potentially the ability to own their own home, just by renting.” Tenants not registered with Credit Ladder  receive no benefit from paying their rent on time, whereas mortgage payments are always recorded on credit files. It was this anomaly which prompted Credit Ladder to launch their free service.

“Tenants across the country are paying their rent on time, yet not building any more credit as a result. The average tenant pays nearly half of their income in rent, but sees no benefit to their credit score or their future housing options. We thought it important that tenants be rewarded for their ability to pay their rent continuously and on time, just as they would with a mortgage.”

5.4 million households in the UK are paying rent instead of a mortgage. Of all of the private renters in the UK, 98% pay their rent on time, according to a recent study by Experian; a study which also showed that more than three quarters of those private renters want their rent payments to be visible on their credit scores.

Bentley concluded by saying, “It is so exciting that many private renters from all around the UK have registered with us. The reaction to our service has been beyond our expectations, with the number of renters signing up to the scheme being 50% up on our pre-launch forecasts. We believe the response to the scheme shows there is a real appetite amongst renters to receive the same recognition for paying their rent on time as homeowners do for making their monthly mortgage payment.”