New avenue for S.Africans to obtain good credit ratings - CNBC Africa

New avenue for S.Africans to obtain good credit ratings

Southern Africa

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This model is for residential use at present. PHOTO: Vision International Properties

“TPN services landlords, property agents and effectively has a user group which submits data and holds data on how well a consumer pays their rent,” Experian South Africa MD, Michelle Beetar, told CNBC Africa.

(READ MORELate rent payments on the rise in South Africa)

“Experian, being one of the major bureaus in South Africa, holds credit payment profile information and makes that available to banks, financial institutions, retailers. We’ve operated as very separate sets of data and for the first time, we’re making that rental payment behaviour data available to our set of customers.”

This partnership between Experian and TPN, the largest credit bureau in Africa, is also expected to tackle financial exclusion in South Africa.

“If you’re a consumer who operates on a cash basis, you don’t actually have a great credit profile. Now we’ll be able to see [that] this individual has been renting for a number of years, they’ve paid on time, they’re a reasonably good credit risk and that’s important,” Beetar said.

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“Giving a lender, the tenant or the mortgage originator a better view and a more comprehensive view of the consumer is always a good thing. It is on a reciprocal basis so the landlords will also have a better understanding of the person that they are looking to rent a property to.”

Beetar added that the model is for residential use at present but that the company is looking at the applicability of commercial use as well.

(WATCH VIDEO: Should you rent or buy a home in 2014?)

“We’d like to think we’re ahead of the pack. It is an exclusive arrangement. It is something that Experian has done globally, so we have similar arrangements in both the UK and the US. We’re not setting the standard in terms of us as a global organisation but certainly in South Africa, we believe we are,” she said.

“It will be available to our clients. We will be going out over the next few months and talking to our clients about what the reciprocity agreement means and how it’s accessible. It’s not yet launched. We’ve made the announcement but we’re expecting to have it online before the end of the year.” 

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