Experian helps to build a positive credit rating

As part of our commitment to improving the financial capability of our customers we teamed up with Experian, Big Issue Invest and the Rental Exchange initiative - a way to build credit histories without taking on any additional credit products.

We looked at how it could help one of our customers to strengthen their credit history…..this is her story…..

On completion of her University degree, Joanne* found herself, like many other students, in debt from a student loan along with other debts she had accumulated to support her through her period of study. She planned on repaying these debts once she got a job but unfortunately she was unable to get a job straight away so she survived on benefits for a while. Joanne decided it was best to move back home with her parents so the bills did not continue to build up.

After being unable to gain employment in her chosen field she returned to study to obtain further qualifications that might lead to employment. She opted to study nursing and graduated a few years ago.

Now, approaching her late twenties, with two student loans to repay and further debts accrued whilst completing her nursing degree, Joanne was feeling the financial strain and had the creditors knocking on her door.

Unfortunately, her parents were in no position to help and, although she was now working as a junior nurse, Joanne’s income was not enough to meet the bills. She wanted to move out of her parents’ home but found getting a place of her own, with her poor credit score, was impossible.

Then Joanne’s luck started to change, she was nominated for a Stonewater property, but with the income she had coming in and the debts she had, she knew life would still be challenging. She approached her local Citizens Advice Bureau who suggested a Debt Relief Order. As the years passed Joanne continued to meet the conditions of the Order which has recently ended. However, even though the Order has cleared her credit score was very poor. This meant Joanne had restricted access to financial services, such as bank accounts, affordable credit, loans etc., and would therefore pay more than the average person for financial products. There was no way she could improve the score because she could not access any financial services to begin the rebuilding process.

Joanne had always paid her rent on time each month when she got paid and the account was never in arrears so when we wrote to her (and our other residents) to introduce the Rental Exchange Initiative, (using rent payments to build your credit history), she was delighted. Later,18 months down the line, Joanne decided she needed to update her car. So, when a family friend offered her their old car at a really good price she needed to find funds to buy the car. Joanne approached a loan company, a high street lender at an affordable interest rate, and had her loan approved. It was approved at the standard interest rate, rather than an inflated one which she had been offered previously because of her poor credit score.

Joanne’s story is an example to our residents, who are struggling financially and have a poor credit history, of how they could see the benefits of paying their rent on time and how the Rental Exchange initiative can help improve your financial capability.

* An alias has been used to protect the identity of our resident.