Proptech Goodlord has partnered with challenger credit reference agency and Open Banking provider, Credit Kudos, to improve the rental process for agents, landlords and tenants by allowing more accurate assessments of a tenant’s financial situation.
The partnership enables Goodlord’s letting agent customers to build a more accurate picture of an individual’s personal finances, such as income and expenditure, to give a clear indication of their overall creditworthiness, using Open Banking.
Unlike a traditional credit check, Credit Kudos’s Open Banking platform takes a more holistic view of an individual’s finances to make a more informed decision about their affordability and creditworthiness, helping more tenants prove their eligibility to rent.
The partnership makes life easier for renters who experience difficulty in building a robust credit file because potential gaps in their address history, moving properties frequently and the absence of a mortgage or other forms of credit make it difficult to build a borrowing history. Tenants with irregular incomes are among those most likely to benefit as these additional insights build a more complete picture of their affordability.
It also helps give landlords peace of mind that tenants can afford to pay the rent given the high levels of income volatility people are experiencing in the current climate. Goodlord’s State of the Industry report recently found that over a quarter (28%) of tenants are worried about the security of their income and one in ten (12%) are worried about their ability to pay rent in the future.
The partnership is a further step towards the complete digitisation of the pre-tenancy process by Goodlord and improving the renting experience for everyone involved.
Tom Mundy, COO of Goodlord: “Open Banking makes it easier for more tenants to prove their financial health, regardless of whether they have a thin credit profile or aren’t earning a fixed income each month, making renting a home easier for tenants and their letting agents.”
Freddy Kelly, co-founder and CEO at Credit Kudos, commented: “By partnering with Goodlord, we are able to help even more people prove their financial health and, ultimately, find a new home. Individuals who may have struggled under the traditional credit reporting system can now benefit from the additional insights available through Open Banking. In addition, having a more detailed picture of an individual’s finances enables agents and landlords to better understand creditworthiness and assess affordability more quickly and accurately. This does not only help make the renting process more secure and faster, but also fairer.”
Research from Credit Kudos’ most recent Borrowing Index found that almost two in five (39%) of renters have, at one point or another, been turned down for credit. Added to this, one third (34%) of renters have previously struggled to access credit from mainstream lenders such as high street banks – with 24% more likely to turn to credit options they would not have previously considered. Declined credit applications and higher cost borrowing can, in turn, make it more difficult for renters to be accepted as tenants in a new home by estate agents and landlords.