Our partners at Canopy teach us about Rent tracking – what is it? And why we should all be doing it
Despite rent being the biggest outgoing each month for most tenants, it’s not routinely added to our credit reports to help with our personal credit rating. So, Canopy have created a very nifty RentTracking product, powered byOpen Banking viaPlaid to enable all renters to get the credit (reported to Experian and Equifax) that they deserve. Read on for credit rating benefits.
Why should we all be rent tracking?
It’s a win-win for all parties in a rental transaction. For tenants, it’s a chance to improve their credit score and their eligibility for credit, which will be especially important if you have designs for owning a home in the future. Even if you don’t, a good credit rating is still something to aspire to for a host of other reasons.
For landlords, meanwhile, providing tenants with a further incentive to pay their rent on time each month – and to get rewarded for it – can only be a good thing.
Rent can sometimes be viewed negatively as dead money, but that needn’t be the case for renters if payments really count to improving your financial record and financial future. By boosting your credit history/score each month, with regular, reliable payments, you’re boosting your chances of securing a mortgage when the time is right to own a home.
One of the first things lenders will be on the lookout for is a good or outstanding credit rating, so they know that the person they are lending to is likely to pay back their mortgage repayments or their car loan each month.
Their rent trackingmakes that possible by making it clear what has been paid, when the next payment is due, and how many months’ rent has been tracked for.
If a tenant can show they have been paying their rent on time, without issues, for a number of months or even years, this bodes well for their chances of convincing a lender that they are a safe bet to lend to.
How does it work?
Canopy’s RentTracking™ product is a simple-to-use system, which involves the tenant connecting their bank account via secure Open Banking and tagging their regular rental payments. So, if a tenant uses their bank account to pay their rent, this account would be added as a ‘connected bank.’ More than one bank is allowed if you use more than one account to pay for rent, although the vast majority tend to use one main account.
Once the account is connected, Canopy uses the information to identify the tenant’s rent payments in future. Tenants pay their rent as usual and these transactions are tracked, allowing Canopy to report their rent to Experian and Equifax – two of the UK’s main credit report agents – at no cost to the tenant. All of this can easily be tracked via the app.
Renters can then sit back and watch their credit report improve, meaning all those years of renting will finally start paying off.
Why we LOVE renting
It goes without saying, here at Get Living, we think renting is absolutely BRILLIANT. With no fee schemes giving you the freedom and flexibility that you deserve. Not to mention our homes come fully-furnished with delightful design pieces and free WiFi (working from home? – no probs).
Renting should never be seen as ‘dead’ money – it should have meaning and relevance, and help you build a strong and healthy financial history. Rent tracking allows that to happen. Each month when renters pay in, it seems only right that they should get something back.
With the current crisis, financial health and security has become more important than ever, and people’s homes have taken on a whole new meaning. Allowing renters to get rewarded from their rental experience, while also improving their chances of borrowing in the long-term. A better credit score translates into more financial opportunities for renters, and less risk of rental arrears.
Canopy’s rent tracking
Canopy is on a mission to revolutionise renting and help people grow, both financially and towards a better life. That means making things faster, easier and fairer for everyone – renters, agents and landlords alike. You can find out more about their RentTracking™.
Image credit: Ketut SubiyantofromPexels.
