Being aware of your credit rating and how your personal financial information is analysed and represented is not often seen as a priority for many.
This is according to Colin Habberton, CEO of PayProp Capital, who says however, this could prove to be a detrimental shortcoming. It is standard practice for registered credit bureaux to collect, verify and evaluate an individual’s financial information.
“Whenever a consumer applies for credit, whether it is to open a clothing account, buy a car or to rent a property, a credit check will usually be done.”
Habberton says consumers should proactively become aware of their credit rating. “PayProp agents are able to access their tenants ‘Tenant Assessment Reports’ and share them with their tenants and landlords. By doing this, they are able to view their current level of debt relative to their income and how this relates to their application for rent and the monthly rental instalment required.”
The report provides a detailed view of a tenant’s level of financial risk to the rental agent and landlord.
By prospective tenants taking responsibility for their credit rating, they are not only able to understand their risk profile and how the service provider will view them, but they can actively work on improving their financial status and become more empowered regarding their financial circumstances.
Habberton shares tips to help tenants improve their Tenant Assessment Report results:
– An individual should have at least 1, preferably 2 active credit accounts.
– Ensure that all accounts are constantly kept in good standing.
– Ensure that accounts do not run into arrears – instalments should be paid timeously and consistently.
– Ensure that your level of indebtedness – the difference between what you owe and what you earn – is managed and improved. In short, spend less and save more.
– Avoid having too many accounts.
Habberton says performing a credit check on a potential tenant has become a norm. “It is important to remember that as a tenant, you need to give your consent for the credit check to be run and for the agent to share your results with the landlord.
“A tenant’s credit information belongs to them and they should request copies of the checks that are performed on them to understand their financial situation, especially if the tenant pays a fee for a rental application.”