When renting a property in the UK, passing a credit check is a crucial part of the process. Landlords or letting agents typically conduct credit checks to ensure potential tenants can reliably pay rent. If you're worried about whether you'll pass a credit check, understanding the process and knowing what landlords look for can help you prepare and increase your chances of securing a rental property.
A credit check is a review of your financial history, including your credit score and any past borrowing, to assess how likely you are to meet your rental payments. The check will be carried out by the landlord or letting agent, often through a third-party credit referencing agency.
During a credit check, they will look for:
Your Credit Score: This is a numerical representation of your creditworthiness, based on your financial history. In the UK, the main credit reference agencies—Experian, Equifax, and TransUnion—calculate this score using different factors.
Outstanding Debts: Credit checks reveal any unpaid debts, such as credit card balances, loans, or overdue utility bills, which might indicate you could struggle to pay rent.
History of Missed Payments: If you have missed payments on credit cards, loans, or other financial commitments, this could be a red flag for landlords.
County Court Judgements (CCJs) or Bankruptcy: Serious financial issues, like having a CCJ against your name or having declared bankruptcy, will also show up in your credit check and could affect your chances of passing.
While credit checks are an important part of the renting process, they are not the only factor landlords consider. Some may be willing to offer flexibility depending on your situation.
If you have a low credit score or negative financial history, you may still be able to rent, but landlords could take additional steps to protect themselves. These include:
Requesting a Guarantor: A guarantor is someone, typically a family member or close friend, who agrees to cover your rent if you’re unable to pay. The guarantor will also undergo a credit check to ensure they have a good financial standing.
Offering a Larger Deposit: If you have poor credit, you may be asked to pay a larger deposit upfront to give the landlord extra security. In the UK, landlords can request up to five weeks’ rent as a deposit.
Paying Rent in Advance: Another option is offering to pay several months' rent in advance. This can reassure landlords that you have the funds to cover the rent, even if your credit history isn’t perfect.
Considering Specialist or Private Landlords: Larger letting agencies tend to have stricter credit check requirements, but smaller, independent landlords may be more flexible, especially if you can explain any past financial difficulties.
There are steps you can take to improve your likelihood of passing a credit check for renting:
Check Your Credit Report: Before applying to rent, it’s a good idea to check your credit report for any errors or inaccuracies. You can get free credit reports from agencies like Experian, Equifax, and TransUnion. If you spot any mistakes, contact the credit reference agency to have them corrected.
Pay Off Outstanding Debts: If you have unpaid bills or overdue loans, try to settle them before applying for a rental property. Clearing debts can positively affect your credit score and show landlords that you’re financially responsible.
Register to Vote: Being on the electoral roll improves your credit score as it provides proof of your address and stability. You can register to vote online through the government’s website.
Make Regular Payments: Consistently paying your bills on time, including utilities and credit card bills, is one of the best ways to maintain a healthy credit score. Even a few months of good behaviour can improve your score.
Avoid Applying for Multiple Credit Accounts: Every time you apply for a credit card, loan, or similar financial product, it leaves a mark on your credit report. Multiple applications in a short period can lower your score, so avoid unnecessary applications before renting.
Provide Proof of Income and References: In addition to a credit check, landlords often ask for proof of income, such as payslips or bank statements, to ensure you can afford the rent. Supplying good references from previous landlords or employers can also reassure potential landlords.
While passing a credit check is an essential part of renting in the UK, there is no guarantee that a particular credit score or financial situation will automatically result in approval or rejection. Each landlord has different criteria, and some may place more weight on factors such as your employment status, rental history, or the presence of a guarantor.
For tenants with a good credit score and a solid financial history, passing the credit check is usually straightforward. However, if your credit is less than perfect, taking steps to improve your financial standing, securing a guarantor, or offering additional payment security can help overcome potential obstacles.
Navigating the rental market and understanding credit checks can be overwhelming, especially if you're unsure about your financial standing. Fraser Bond offers professional advice and guidance to tenants seeking properties across London, including those concerned about their credit history.
Our team can help you explore rental options that match your financial situation, provide recommendations on improving your rental application, and assist with finding landlords who may be more flexible with credit requirements. Whether you're looking for long-term housing or short-term rentals, Fraser Bond is committed to making the rental process as smooth and stress-free as possible.
