A new study from Experian, the global information services company, reveals that more than three million¹ social housing tenants could be missing out on the most competitive online financial deals due to a lack of a credit history and also limited internet access.

According to the Social Housing Tenants² study, one third (33.5 per cent) of social housing tenants in the UK do not have access to the internet at home, with one in seven (14 per cent) unable to get online at all, and three quarters (76 per cent) claiming they have never applied for online products and services. Meanwhile, 61 per cent³ do not have enough of a credit history to enable online financial services and credit providers to verify their identities electronically, meaning they are often unable to get the best online deals and rates, or to even access an online product at all.

To overcome this, Experian and Big Issue Invest (The Big Issue’s social investment arm) have partnered to create The Rental Exchange. The initiative allows social landlords to submit information about their tenants’ rent payment history to Experian, which will strengthen their credit history. This supports more successful electronic verification of a tenant’s identity when they search and apply for financial services online. Adding rental payment data to an application would result in 84 per cent of social housing tenants having a strong enough credit history to validate their identity and potentially gain access to more competitive online financial services. As a result, three-quarters (72 per cent) of social housing tenants’ credit scores would also increase⁴.

Jim Mullan, Group Chief Executive at the Big Issue, said: “It’s a vicious circle. On top of the challenges of getting online in the first place, social housing tenants miss out on the best online deals because service providers often cannot easily check who they are. When someone applies for credit or a financial product, a credit reference agency will be able to confirm to the provider that you are who you say you are with a high degree of certainty if they can validate you against two or more records.  For most people this is the electoral roll and a piece of credit data, such as a loan or mobile phone contract. It is this second data record which is often missing for social housing tenants and which leads to them missing out on these online deals.”

Experian’s own data highlights that only 39 per cent of social housing tenants in the UK currently have two records against which their identity can be verified, while the UK benchmark for the population as a whole is 87 per cent.⁵

Jonathan Westley, Managing Director of Experian’s UK&I Consumer Information Services, comments: “The digital authentication rate amongst social housing tenants is less than half of that of the wider population, and this group suffers financially as a consequence. If an online provider cannot fully authenticate a person, they either price their product based on a high level of risk, making the service more expensive, or simply refuse it. However, using rental data as part of the electronic authentication process improves the level of insight available for providers and means that fewer tenants are excluded from or pay a higher rate for products. This is all part of the challenge to digitally enable everyone. Digital inclusion stops isolation as well as giving access to online products and cheaper financial deals.”

Further insight the Social Housing Tenants study highlights the extent of digital exclusion, revealing that: 

• Digital exclusion is greatest amongst older age groups - almost a third (29 per cent) of tenants aged over 55 do not have internet access at all, and 80 per cent say they have never applied for products or services online.
• Just one per cent of 18 to 34 year old tenants are without any internet access; however 68 per cent have never applied for online products and services.
• More surprisingly, one in five (19 per cent) social housing tenants living in London are not able to get online and 79 per cent have never applied for online products.

For further information about the Rental Exchange or to get involved, please visit: experian.co.uk/rental-exchange

1 – According to Experian, there are 4.8 million people living in social housing in the UK

2 - The research was carried out on behalf of Experian by Opinium Research between 22 July and 22 August 2014 among 1,000 social housing tenants via a national telephone survey

3, 4 & 5 – The Rental Exchange – Reviewing the Journey So Far. Sample (c 162,000) of the rent payment records already shared with the Rental Exchange, from social housing providers, were analysed in a simulated credit bureau environment to assess the impact the information would have on credit scores