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Could your housemate’s credit rating affect your mortgage
Money Advice, Debt Advice & Debt Help

Could your housemate’s credit rating affect your mortgage

Credit reference agency Experian has revised plans to include rent payment history on people’s credit records, after it was revealed that people’s credit ratings could be affected by other tenants in the household.

It would have meant that if one of your housemates or flatmates had struggled with credit in the past – even before they lived with you – your own chances of getting a mortgage or loan could be affected due to the financial association.

But according to MoneySavingExpert.com, Experian have now revised their plans to ensure that co-tenants won’t be financially linked in this way. Rent payment history will still be recorded, but will be completely separate from other tenants’ credit history.

Credit linking of renters inappropriate

James Jones of Experian commented: “One advantage of making a very early announcement is to listen to people’s views and take these into consideration.

“It is now clear this [credit linking of renters] would be inappropriate in many cases, due to the nature of many joint tenancy arrangements.

“As a result, it is not now our intention to create financial links on credit reports from rental data.”

James Falla, senior debt expert at Beat My Debt welcomed the news.

“Linking the credit reports of individuals simply because they live in a shared property is simply wrong. This often leads to totally innocent parties having their credit files negatively affected which in turn will make it more difficult for them to take any form of credit  in the future” he said.

Financial links and your credit history

Although simply living with someone isn’t normally enough to link your credit histories together, having any shared finances could be. This mostly applies to married or other long-term couples who share a bank account or mortgage, for example.

However, if you share bills for things like gas, electricity or broadband, and you don’t keep up with your payments, it could affect the credit ratings of all those named on the agreement – even if not all of those people are responsible for the missed payment.

If you check your credit file and believe you have any unfair financial associations, you may be able to file a ‘Notice of Disassociation’ to the credit reference agencies to get them to remove the links. This could be very important if you’re looking to get a mortgage after living with anyone who has had trouble with their money.

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