Experian and TPN team up to bring credit and rental data together for the first time in South Africa
Category Property Finance
Experian announced that it has signed an exclusive partnership with TPN credit bureau, the largest rental bureau in South Africa specialising in vetting tenants for rental properties.
This means 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 mortgages payments in South Africa has always been 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 those among South Africa’s under-banked population. The move will allow consumers to build or rebuild good credit profiles by paying rent on time to enable 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.
· A boost for first-time buyers to 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.
· Easier identity verification. Many financial organisations rely on electronic identity checks based on credit reports. Stronger credit reports will help more people successfully satisfy these checks, avoiding the need to resort to slower, paper-based methods.
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.
“This exclusive partnership will not only support our 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,” said Michelle Beetar, Managing Director Experian South Africa. “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.”
“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. 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.
“TPN focuses on the collection of rental payment behaviour, this partnership with Experian allows both credit providers and landlords see a more complete picture of the consumer,” said Michelle Dickens, Managing Director TPN credit bureau.
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2014, was US$4.8 billion. Experian employs approximately 16,000 people in 39 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
TPN launched in 2000 as a niche market database specialising in collecting information on tenant behaviour. In 2006 TPN registered as a credit bureau and extended the tenant database to include the tenant’s monthly rental payment profile information. The TPN database assists property managers and property owners select quality tenants based on their previous rental performance. www.eprop.co.za