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UK Consumer Credit Referencing

 

Tenant Credit Checks


As a landlord, picking the right tenant for your property can be a risky business: while personal and employer references are all very well, can you be sure that they will pay the rent on time? 

In a nutshell, the answer is no - but a simple credit check on any prospective tenant can help to set your mind at ease, and tell you whether they have had any previous debt problems that you should know about. Getting a credit check on a tenant and following other precautions such as those suggested here for landlords to avoid bad credit risk tenants, can save time and money later on.

A check with the tenant's previous landlord will tell you if there have been previous issues with paying the rent on time, but it can also be good to get a more independent opinion in the form of a comprehensive credit check: which won't guarantee perfect tenants, and which will involve a small cost, but will provide you with a great deal more peace of mind when entrusting a stranger with your property.

If letting your property through an agent, you will find that all agents differ in terms of the use of a third party to conduct credit checks. Some will offer a high level of credit check than others, while the third parties that they use also vary. It is worth speaking to a few letting agents to see whether they conduct such checks, and the extent of the checks that they provide.

If letting your own property, make sure you do your research and choose a reputable credit check provider. Whether letting through an agent or privately, you will need to get permission from the prospective tenant before any checks can be completed, by way of a release form signed by the tenant which authorises you to do so. Sample forms can be found online quite easily.

Credit checks can be conducted through reputable services such as Experian Tenant Verifier and Consumer Check, which provide comprehensive tenant referencing services, running checks on a variety of factors to warn you of any potential problems. 

Such services provide landlords with searches of online credit records, not only to determine their credit history, but to understand other factors that may increase their risk. Identity and fraud checks, risk scores and employment scores are all important factors that may separate a reliable tenant from a poor tenant - and these measures can all be checked and understood by using an online credit scoring facility to check tenants before signing on the dotted line.

If required, some credit check services can also provide checks on references from previous landlords and employers or accountants, and if there is a guarantor involved in the rental agreement, you can also check their ability to cover the rental payments.

The Consumer Check website provides a sample report which gives a detailed view of what sort of information is included in a credit check, and how it is laid out - see an illustration of how a tenant credit check would appear. While such checks may seem like too much hassle and an unnecessary cost, the peace of mind that they can provide really is invaluable.
 
 

  

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