If you are planning on renting a property and are concerned about clearing your credit check read on:
Firstly, the landlord/letting agent must get the consent of an applicant to gain access to their credit file. The checks will be done by any of the 3 credit reference agencies (CRAs). The UK has TransUnion, Equifax and Experian. For the credit check, the payment is done by the entity requesting the check, not the potential tenant.
Credit Report Details
There will be different sections in the report with the prominent ones shared below responsible for clearing or failing the credit check.
- Voters/Electoral roll: This section shows if the applicant is enrolled in the electoral rolls where they lived. It is legally binding for everyone to be registered with their area’s local electoral roll. If unsure before applying for a credit check with the Electoral Registration Office of your area. Not being on the voter’s list may impact the credit check negatively with the application getting rejected.
- CCJs (County Court Judgement) letter: They form an integral part of the credit check. If an individual is issued a CCJ and there are unpaid debts it will go against the applicant. If there are any doubts about having a CCJ (before applying) contact any of the CRAs for a copy of the credit report.
- Adverse credit: It is found in the credit history of individuals that have had issues with repayment of debts. Defaults, not paying the full sum or late payments form part of having an adverse credit history.
- Affordability: One of the purposes of conducting a credit check is to confirm if the tenant can pay the rent. For this, the expenditure and income are evaluated to determine if they can afford the rent.
Not clearing a credit check
If you are not able to pass the credit check that is okay! There still is a way to get a property on rent through a guarantor as an intermediary.
Tips to ensure passing a credit check:
- Make sure that all payments are on time and up to date.
- Go through your credit report to ensure all info is accurate.
- Ensure you are on the voter’s roll in the area you stay.
- Always sign a tenancy agreement with the property’s landlord where you live currently.
Some of the other aspects a landlord/letting agent will examine during the credit check are:
Get a referral letter from your company/employer stating your designation and monthly salary. An added asset would be a letter of recommendation from your employer.
If you are on a work permit in the UK it might influence your ability to rent a property. However, getting a recommendation letter from your previous landlord could stand you in good stead.
Before you have a credit check carried out as a tenant it is best to ensure that you cross your T’s and dot your I’s before the check is carried out. However, even if you do not clear the credit check you could always use a guarantor as an intermediary.