Credit checks for renting

Renting a house or flat can be a difficult process. Even if you find the place you want and have enough cash for a deposit, you still need approval from the landlord.

They’ll want to be sure that their tenant is responsible and able to afford to pay the rent that’s been agreed. One way they assess this is by conducting credit checks, which help provide a snapshot of a tenant’s financial history.

Why do landlords run credit checks for tenants?

Landlords want to ensure that they will be paid the rent they are owed when they rent out a property. A credit check can help give them information about the tenant’s previous history when it comes to paying back debts.

They can reveal County Court Judgements (CCJs) on a tenant’s credit report. This could make a landlord decide that the potential tenant will have trouble paying them in the future.

Once a tenant is living in a property, it can take time to get them out if they stop paying their rent. A landlord will have to give the tenant written notice of eviction and then possibly get a court order called a ‘possession order’.

This means that landlords will want to be as sure as possible that eviction can be avoided and that tenants will not end up in arrears.

If a landlord runs a credit check, what do they see?

Before a landlord can run a credit check they must get permission, usually in writing. The information they will receive will not be as detailed as the information available to lenders, credit reference agencies and the tenant themselves.

It will only include information held on public registers, such as:

• The electoral roll
• The Individual Insolvency Register
• The Register of Judgments, Orders and Fines.

Essentially a landlord will be able to confirm a tenant’s name and address, as well as any history of insolvency or CCJs. They can’t access information on credit agreements, credit limits or repayments.

Tenants are not legally required to agree to a credit check, but without one a landlord may not feel confident renting to that individual.

What other information might a landlord ask for?

As well as a credit check, a landlord may also ask for references from previous landlords or from employers. They are also legally obliged to make sure that a tenant is allowed to live in the UK, so will ask for some form of identification to confirm this. 

They might also require proof of employment, such as payslips or a P60, in addition to the first month’s rent in advance.

In some cases, it might be necessary for a tenant to use a guarantor. 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 is in a better financial position than the tenant. 

What can you do if a landlord rejects your application?

If you’re rejected by a landlord because of your credit history, you could try and find out exactly what led to this decision as you might be able to get feedback from them. You can also check your credit report to get a full picture.

If you know that you have a poor credit history, it’s a good idea to be honest up front. This can save time and even help you avoid wasting money, for example, if you’re rejected after paying non-refundable agency fees. 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 landlords

If you’re interested in checking the details of your credit history, you can get online access to your credit report with the Equifax Credit Report & Score, which is free for 30 days and £14.95 monthly thereafter.

What credit score do I need to rent?

If you’re wondering whether your credit score is good enough to rent a property, it's important to understand that no set number guarantees approval.

However, having a higher credit score generally indicates a stronger credit history. This can certainly work in your favour.

That said, it's still possible to be accepted as a tenant even if your credit score isn’t perfect.