The Role of Credit Checks in Renting

Finding a property to rent can be a lengthy process, from securing a deposit to passing reference checks. One of the most important elements is the credit check for renting, where landlords or letting agents assess whether a prospective tenant is financially reliable. While this may feel intimidating, understanding what a credit check involves and what landlords look for can help tenants prepare and improve their chances of securing the property they want.

This article explores why landlord credit checks are carried out, what information is reviewed, what tenants can do if they fail and how to put yourself in the best position before submitting an offer for a rental property.

Why Do Landlords Run a Credit Check for Renting?

Landlords rely on rent to cover mortgage payments and maintenance costs and generate an income. If a tenant fails to pay rent and stays on in the property, sometimes even after the tenancy agreement has ended, it can take a landlord up to two years to regain possession of the property, quite apart from suffering serious financial loss. For this reason, credit checks are a key safeguard in the buy-to-let market.

A credit check for renting provides the landlord with a snapshot of how a tenant has handled financial commitments in the past. It might indicate if the tenant has any County Court Judgements (CCJs), a history of insolvency or missed payments that suggest difficulty in meeting obligations.

By reviewing this information, landlords can make an informed decision about the potential risk of rental arrears. Most landlords simply want reassurance that rent will be paid on time and a credit check offers a certain level of confidence.

What Do Landlord Credit Checks Show?

A landlord credit check does not show as much detail as a lender’s full credit report. Items that a landlord can see include:

Publicly available records

Landlords see information from registers such as the electoral roll (to confirm name and address), the Individual Insolvency Register, and the Register of Judgments, Orders and Fines.

CCJs or insolvency  

These appear prominently and may discourage a landlord from proceeding.

Identity confirmation

The check confirms that the tenant is who they say they are and live where they claim. This is important because landlords are obliged to check that prospective tenants have the right to reside in the UK.  

Ultimately, the credit check is more about verifying risk factors and confirming that a tenant is legally and financially credible.

What Else Might Landlords Ask For?

Alongside a credit check for renting, landlords or letting agents often request further information from prospective tenants, including:

• References from previous landlords: Proof that you paid rent on time in your last tenancy.

• Employer references: Confirmation of employment and salary.

• Proof of income: Payslips, P60s or tax returns for the self-employed.

• Proof of right to rent: ID such as a passport to confirm you can legally live in the UK.

In some cases, if a tenant has a weak credit history, landlords may require the applicant to find a guarantor, typically someone with strong finances who agrees to cover the rent if the tenant cannot.

What Happens If You Fail a Credit Check for Renting?

Failing a credit check does not always mean the end of your rental hopes. There are several possible outcomes:

• Feedback from the landlord or agent: You may be told what caused the rejection, such as a CCJ or insolvency record.

• Upfront payment request: Some landlords may accept tenants with weaker credit histories if they pay a significant proportion of the rent over the contract upfront.

• Use of a guarantor: Providing a guarantor with stronger credit can often overcome a failed credit check.

• Alternative properties: If one landlord is unwilling, another may be more flexible, depending on demand in the area.

It is best to be upfront with a prospective landlord if you know you have credit issues. Honesty can prevent wasted time and money on non-refundable agency fees.

How Long Does a Credit Check Take for Renting?

Most landlord credit checks are completed within 24 hours, although sometimes it can take a few working days. To be safe, expect the entire tenant screening process to take one to two weeks.

Tenants must give permission in writing before a credit check is run. Without this consent, the landlord cannot proceed, though refusal may lead to the application being rejected.

Preparing for a Credit Check for Renting

Tenants can take proactive steps to improve their chances:

• Check your own statutory credit report first: Services from companies such as Experian or Equifax let you see what landlords may find.

• Correct inaccuracies: If errors appear, raise a dispute with the credit reference agency.

• Pay off outstanding debts: Even small amounts can improve your credit report.

• Register on the electoral roll: This helps confirm your address.

• Be upfront: If you know of past issues, explain them to the landlord and propose solutions, such as a guarantor.

By preparing in advance, tenants can avoid surprises when the check is carried out.

Conclusion

For tenants, credit checks can feel daunting, but it is simply part of the landlord’s due diligence to ensure rent will be paid. Understanding what landlords look for, preparing your finances and being open about any issues can make the process smoother.  

For landlords, credit checks are a practical safeguard against the problems of arrears and eviction. By knowing what is involved, tenants can approach the process with confidence and improve their chances of securing the right rental home.

FAQs

Q. What is a credit check for renting?

A. A credit check for renting is when a landlord or letting agent reviews a tenant’s financial background using records available to credit rating agencies. It helps confirm identity, spot CCJs or insolvency and assess whether the tenant is likely to pay rent reliably.

Q. How to pass a credit check for renting?

A. You can improve your chances by checking your credit report in advance, correcting errors, clearing debts, registering on the electoral roll and offering a guarantor if needed. Being upfront about issues can also help.

Q. Who pays for the credit check for renting?

A. In most cases, landlords or letting agents cover the cost of a credit check for renting. However, tenants should confirm upfront whether any fees will be charged to them.

Q. How long does a credit check take for renting?

A. Most checks are completed within 24 hours, though sometimes they can take a few days if additional verification is required. The entire tenant screening process may take one to two weeks.

Q. What does a credit check show for renting?

A. It shows publicly available records such as electoral roll data, and CCJs, insolvency records and identity details.

Q. What happens if you fail a credit check for renting?

A. If you fail, you might still be able to rent by paying a significant portion of the rent over the agreement upfront or providing a guarantor.

Q. Can you rent without a credit check?

A. Technically, yes. A landlord may decide not to run one, but most prefer to do so for reassurance. Refusing a credit check can reduce your chances of being accepted.

Q. What score do you need to pass a credit check for renting?

A. There is no set score that guarantees success. Higher scores suggest a stronger financial history, but landlords make decisions based on multiple factors, not just a single number.

Q. Do guarantors undergo credit checks too?

A. Yes, landlords often run a credit check on guarantors to ensure that they are financially stable to cover the rent if the tenant cannot.

Additional Sources:

https://www.equifax.co.uk/resources/loans-and-credit/credit-checks-for-renting.html

https://www.experian.com/blogs/ask-experian/what-landlords-look-for-credit-check/

https://www.cia-landlords.co.uk/advice/what-credit-checks-do-landlords-use/