What do lettings agents check for with a credit check

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Landlords should conduct credit reference checks on any prospective tenant. This will show you if the tenant pays their bills on time each month and will detail any late or missed payments over the last few years. It will verify whether the tenant has any debt and how much that debt is. All of this data is useful for a landlord.

If the tenant has a history of paying bills late or not at all then you might not want to offer them a tenancy. To conduct a credit reference check you will need to use a third party. Because the data is sensitive only certain companies can request access to it. Banks and financial institutions are often able to carry out credit reference checks as lenders. In most instances a company will need to be authorised or regulated by the Financial Conduct Authority before they can request credit information.

In most cases letting agents will also use a third party. You can go through online letting agents like Open Rent or you can go directly via the credit reference agency. Budget pressures and costly void periods, not to mention eviction procedures, all take their toll on a landlord's bottom line. Good tenants are a dream for a landlord and a solid referencing process should mean rooting out the bag eggs.

Much like a job interview, referencing procedures take a look into all aspects of your life, from income to previous tenancies and even your right to rent a property in the UK. Their know-how and experience means they can easily root out potential problem tenants through a combination of gut instinct and thorough background checks.

When screening you, an agent should ask questions about your employment, previous employment and renting history and why you are looking to rent a particular property in a particular area. As well as details about your work, they might ask how far the commute is. After all, a tenant with a long, frustrating commute is far more likely to want a short-term tenancy or attempt to end a tenancy early if the commute becomes unmanageable.

The agent should ask about previous properties you have rented, your experiences and why you left your last rental property. This stage of the screening process is about the agent getting to know you and assessing your suitability for the property you want to rent.

Primarily landlords are only looking for verification that you are who you say you are , along with any court information, such as County Court Judgments, that might be related to you having missed past payments, all of which is available with a Soft Search.

Until recently there was no way for lenders to see your past history of making rent payments, regardless of whether they had been made on time or consistently missed, unlike Application Searches carried out when you apply for credit, the type of search used by landlords only shows publicly available information.

In recent years a number of rent reporting platforms have been made available that allow your rent payments appear on certain versions of your Credit Report.

Landlords enrolled in these schemes will be able to see rent payments reported in previous tenancies, meaning there is now more reason than ever to make sure rent is paid on time. The two main pieces of information they are looking for are Court Records and your Electoral Roll status. Because only a Soft Search is carried out, that means defaults themselves will not appear in this credit search. If you do have adverse court information on your Credit Report, it still might not stop you from being able to rent — many places will accept a larger deposit or guarantor co-signer upon application.

Find out more about getting the best chances of renting if you have a poor credit history. This is someone who agrees to pay the rent in the event that the tenant cannot. This will often be a parent or relative who has a better credit history or proof of a steady income. You might be able to get feedback from them, and whether you do or not, you can still check your credit report to get a full picture.

It might be the case that you can still rent the property by paying a larger deposit or using a guarantor. If you think your credit history is preventing you from being able to rent, you can look at factors that might be affecting it. Addressing these issues can help improve your creditworthiness and give a positive indication to lenders or service providers.

Knowledge Centre Loans and Credit Credit checks for renting Renting a house or flat can be a difficult process. Why do landlords run credit checks for tenants? What information does a landlord credit check reveal?