7 Ways to Screen and Credit Check a Tenant
In economically challenging times, ever-increasing numbers of people are choosing to rent in absence of getting on the property ladder. This is good news for landlords and letting agents of course, and the current UK rental market is stronger than ever before.
Since more and more people are choosing to rent, this means that statistically, the number of problem tenants is on the rise. Anti-social behaviour and property damage can be a real headache for landlords, which is why a comprehensive tenant screening process is highly recommended.
Of course, it’s not just anti-social tenants causing problems for landlords, as financially unsound tenants failing to pay the rent can cause a serious loss of earnings, even before taking into account the solicitors fees and court costs required to secure an eviction order.
Thankfully, there are a number of steps both letting agents and private landlords can take to ensure their tenants are reliable, trustworthy and financially secure. By requesting that prospective tenants fill in an application form of sorts, landlords can then gauge all the vital information required before deciding who to contract with.
Whilst it’s important for a landlord not to overstep the mark and scrutinize the lives of their tenants too much, no landlord can afford to do without making some simple, straightforward background assessments into the working and financial lives of their prospective tenants. Always remember, your property is an investment, and a poorly-chosen tenant can potentially see that investment plummet. Here we take a look at seven ways to ensure you make the right choice:
1) Employment history
By requesting the work history of a potential tenant you can ascertain their reliability to a certain degree, as well as finding out whether their current annual income is likely to be sufficient enough to cover rental costs. If a person has any prolonged periods of unemployment, or moves frequently from job to job, it can be worthwhile finding out why – these aren’t necessarily signs that an individual is likely to be a problem tenant, although investigating further can help clear matters up. Landlords and letting agents can also ask for a letter from the current employer to confirm income and employment details.
2) Financial statements
It is common practice for landlords to request recent bank statements (typically for the previous 3-6 months) in order to gain a further clarity into the incomings and outgoings of a prospective tenant, and to confirm that any employment information supplied is factual.
3) Contact information for previous landlords
A list of previous addresses with landlord contact information, a brief outline of the tenant’s reason for leaving and a summary of rent paid will once again help you to make the right decision. As per employment information, keep an eye out for any gaps in rental history, or any missing landlord contact details from an application – again, there may be legitimate reasons for not providing such information, but it pays to be as thorough as you possibly can. A search with ConsumerCheck.com will help you validate the previous addresses given with the Voters Roll records on file. If there are clear anomalies between the previous rented addresses and periods stated by the tenant, and the records on the Voters Roll, landlords can then decide for themselves if the would-be tenant’s explanation is one they are comfortable with.
4) Personal interests/lifestyle information
Tenants are free to do as they please in their rented accommodation to certain degree, although some landlords may be reluctant to rent to smokers or pet owners, as refurbishments to a property due to the potentially damaging nature of both can prove costly. Once again, it’s entirely down to the discretion of the landlord – some may not mind smokers, whereas others will.
5) Personal references
A thorough personal reference should include the name of the referee, length of acquaintance, their relationship to the potential tenant and contact details, including a phone number.
6) Tenant credit check
Running a credit check on a prospective tenant can reveal all sorts of information about their financial past. Landlords should look for any history of missed/late payments, payments to debt collection agencies and a poor overall credit score. Be certain to also take into account any current debt – if there are large outstanding priority debts, it’s possible that the rent could go unpaid, even if the individual seemingly earns a reasonable wage. It goes without saying that in austere times, one or two missed payments does not necessarily equate to a being a poor tenant, although landlords may want to think carefully before contracting with an individual with previous IVAs or bankruptcy. A report from ConsumerCheck.com includes a full credit history check and credit score.
7) CRB check
Enhanced CRB checks can reveal a lot about a person, including whether they’ve been convicted of any criminal offences. Although CRB checks are relatively rare when it comes to renting accommodation, the option is always there for the overly-cautious landlord.