Tenant Credit Check Services For Landlords & Why They’re So Important

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Do you bother credit checking prospective tenants? I never used to because I could never be bothered, but as I gained more experience, I realised there are a lot of undercover shitheads out there that are itching to make a sucker out of everyone. Granted, credit checks aren’t bulletproof, they won’t guarantee “perfect tenants”, but they will reduce a potentially large risk.

Credit checks are relatively cheap, and worth the investment. Most reputable letting agents will use third party companies to perform comprehensive tenant credit checks on behalf of the landlord. The less respectful agents will cut corners and get intermediate checks. The real snake oil agents will avoid credit checks all together (but say they do it on the tin). So if you’re using an agent, make sure you enquiry about what level of credit checks they actually do, and ask to see the report/results!

If you’re not using an agent (or even if you are), the good thing is, you can contact a credit check service directly and do the checks yourself.

Why Credit Checks are so important

Notoriously, tenants with poor credit ratings will avoid going through letting agents, because they’re know most agents perform thorough credit checks. So to try and bypass that obstacle, the tenants will try to target landlords that are managing their own properties, because many of them don’t bother with credit checks. That allow will their poor credit rating to go undetected!

So if you’re going it alone, without a letting agent, it’s especially important to get all your prospective tenants credit checked before striking up a deal, because you’re usually the prime target! That said, it’s still incredibly important to be just as vigilant if you’re using a letting agent, for the reasons already explained.

It’s also crucial to completely ignore what your prospective tenant tells you regarding their own credit rating. Let that noise go through one ear and out the other. It’s essentially garbage, and here’s why:

Here’s what happened to a landlord recently, which they shared on the landlord forum:

Last Thursday evening I conduct 3 viewings, one after the other, on a modest property.

Everyone seems very interested. One person makes an offer on the night, I tell them not to worry, I won’t make the decision there and then. On the Friday morning I get contacted by the other two viewers – they all want it. They all offer the asking price. I get to choose.

So I actually choose the first person who offered.

Scientific? No. Gut feel? Yes.

I speak to her on the phone, I ask if she’s OK with the rent, OK with the deposit and whether she has a clean credit history. She says that she had a few problems several years ago, but that’s long-gone history.

Anyway, they pay to apply, they pay for the credit checks… today it comes back with 5 CCJs.

That’s 5.

Around £6,000 in unpaid debt. Why did they go through the application process? Yes, you can be unaware of a CCJ… but can you be unaware of 5?

Hopefully that’s enough to scare you shitless into religiously doing credit checks on all prospective tenants :)

Permission Required

In order to perform a credit check, you will need permission from the prospective tenant. The applicant will need to sign a release authorizing the landlord/agent to perform a credit check.

Most credit check companies will provide landlords with a form online which can be downloaded for free, but I use a homemade generic one, which captures only the information I need. You can download the Tenant Reference Form I use.

If you use letting agents to find tenants, it’s probably worth investigating:

  • 1) which company they used to do credit checks
  • 2) what type of checks they perform. Most credit check services will provide different levels of service, from basic to comprehensive

However, if you’re not using a letting agent, and managing your property yourself, you can easily credit check your tenant directly through a specialised service.

I’ve looked through a few services online, and here are the one’s that look quite alriiight…

CompanyPriceNotes
Price
£15.88
Notes / Includes
Basic check for £15.88 with Tenant Verify reveals an individual’s credit score, outstanding debts, whether there have been any county court judgments filed against them, and their main residence for the last six years. More comprehensive check with Tenant Verify for £30.88 gives you the landlord’s contract of employment, earnings and character references.

More Info
Price
£9.95
Notes / Includes

They offer 4 different levels of tenant screening, the most basic being £9.95. The full tenant profile express package is a lot more comprehensive, which costs £29.95.

*Property Investment Project has been given an exclusive 10% discount code: SCREENING10 (only valid for first tenant screening application)!

More Info
*10% Discount code: SCREENING10
Price
£15
Notes / Includes

Starting from £15 + VAT, quick online tenant referencing, with instant references. Their tenant referencing is powered by Experian.

More Info
£8.95

Notes / Includes

They offer a bronze, silver, gold and platinum service, ranging from £8.95 – £29.95.

More Info

Please note, I try my best to keep the information of each agent up-to-date, but you should read the T&C’s from the agents’ website for the most up-to-date information.

Important: I want to strongly clarify, doing a credit check should be one small part of your referencing protocol, you should be using several other referencing techniques to reduce your risk. For a more complete guide on tenant referencing, I invite you to read the tenant referencing guide for landlords.

Do you bother getting a credit check on your tenants? If so, which service do you use? Does anyone know of any other reliable credit check services?

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24 Comments- Join The Conversation...

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Sam 24th March, 2010 @ 18:27

It's also important for landlords to get the last 3 months bank statements, see payslips, proof of utility bills and get references - and ensure they are CHECKED OUT (with previous landlord and employer).

We recently had a landlord come to us who had taken in a tenant - but who he had to ask to leave after a month...why?

She claimed to be a medical professional was suited and booted and talked the talk. BUT...turned out she was a heroin addict and a patient at the hospital she claimed to be a professional at!

Do your research and check everything!

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Alexander Munroe 21st May, 2010 @ 09:37

I know some landlords use this website called Landlords Together (http://www.landlordstogether.co.uk). They help landlords identify known good and bad tenants.

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Anon 2nd March, 2011 @ 12:49

You cannot assume that just because someone has bad credit they are scum!! I am hard working, honest and pay my bills and rent on time but have bad credit due to a (thankfully previous) bad relationship. I agree requesting bank statements is a good way to check people.

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Ken 14th July, 2012 @ 11:26

Just remember, nothing in life is 'free', and that includes referencing......you may have to pay a little to find the correct details about a future tenant, it's worth every penny!

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Richard Ward 7th November, 2013 @ 11:04

I've recently used an on-line screening service who provided a really easy to use service - http://www.tenantscreening.co.uk

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Mickey Mixon 27th December, 2013 @ 05:21

This is great it can give you details about checking the tenants and it will give time to assess the people.

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Mandy Thomson 10th May, 2014 @ 22:31

...and that includes live in landlords! While you can get rid of a lodger much more easily than a tenant, you're going to be living with a lodger - that person will have access to your home and possessions as well as children and pets if you have them - for tips on referencing lodgers, see http://www.lodgersite.com/Can_I_Trust_Them.html - also for advice on how the Immigration Bill, which is likely to become law later this year is likely to affect ALL landlords.

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LauraJayne 3rd July, 2014 @ 10:49

Hello there I'm currently 7 months pregnant and desperately in need of a property, I've found two and viewing them tomorrow. I've got a guarantor but about 3 years ago he had a county court hudgement, I think it's been paid or is being paid at the moment but I'm sure it's paid. He has 3 contract phones, works abroad and banks between £600/£800 per week and has 2 cars on finance but it's a finance company that accepts blacklisted people. I have a letter from social services informing the landlord/agent that I'm in need of a property and that me and my guarantor are liable to 100% pay the money. I'm really paranoid we won't get accepted! Can anyone help me please??

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Raymond Jones 13th October, 2014 @ 14:38

Hi

What you have on this site is all for the landlord to obtain credit checks for a tenant.

I see nothing on any property site where a tenant can obrain a credit check on a landlord.

How does a tenant know if there landlord even owns the property or is behind in the mortgage which would put the tenent at risk.

Credit checks should work two ways.

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Benji 13th October, 2014 @ 20:23

@Raymond,

"How does a tenant know if there landlord even owns the property"

They check on Land Registry here;
https://www.gov.uk/search-property-information-land-registry

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Ray Jones 13th October, 2014 @ 20:54

Reply to above comment. So how would a tenent know if a landlord was or is in mortgage arrears ?

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Benji 13th October, 2014 @ 23:34

@Raymond,

"So how would a tenent know if a landlord was or is in mortgage arrears ?"

That is less easy to find out.

I'd suggest the following;

Ask the landlord. Most decent landlords would be happy to show a mortgage statement. Ask them about themselves.
Obviously not easy if you choose to go through a letting agent rather than direct with the landlord but it is still possible. If it is a letting agent, check they are ARLA registered and see how long they have been established. Check them out.
Check when the property was bought (from land registry).
Look at if it has a mortgage charge and who it is with. Is it a BTL lender? If not, ask if the landlord has consent to let.
Look at how much they paid for it compared to similar properties. If they bought 15 years ago for quarter the current price they will be a safer bet than someone paying top whack in 2008 and now possibly in negative equity.
Check if the rent is the going rate, if it is cheap, there may be a reason.
Check the register of CCJ's-
http://www.trustonline.org.uk/
Check the bankruptcy and insolvency register-
https://www.gov.uk/search-bankruptcy-insolvency-register
Speak to the previous tenants.
Speak to the neighbours.
Look the landlord up online.
Check their residential address and carry out a similar assessment.

Of course, this will all take a little bit of time and effort.

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Elaine 1st November, 2014 @ 15:25

Potential landlord asking for us to pay for refs £150 and guarantor £120 - is this normal procedure?

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Marie Cherry. 17th November, 2014 @ 20:30

Elaine, no, you shouldn't be paying your landlord for giving him/her references/guarantor contract!

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Dird 9th January, 2015 @ 16:46

@Marie Cherry: is it not? We rented through a letting agent (tenant not landlord) and were charged £150+ for 3 of us to be vetted. I assumed it was normal practice e.g. to cover the cost of the vetting

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Denise 12th August, 2015 @ 13:11

I have used FCC Paragon in the past for Tenant referencing. Has anyone had any bad experiences using this company. I charged £50 per reference and this covered the TDS tenancy Deposit Scheme as well. I understand rental agents charge a great deal more than just costs.

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Trevor 8th February, 2016 @ 11:13

Hi As an agent, we do charge a small application fee of £25 per adult, we do not charge the guarantor a fee. I know lots of agents / landlord do charge every person who requests an application and some can charge as much £150 each. We only charge the tenants whom we feel are serious about the property and who have submitted an application, however, we only accept 2 applications for the credit check and unfortunately, we do have to charge as we do not know if either, both / none of them will be suitable until we get the credit check back.
For tenant checks, we use www.landlordsecure.co.uk who have different levels of referencing available.
I believe some agents / landlord are exploiting this fee to provide them with additional funds for themselves.
It is time this regulated and would suggest a maximum levy be introduced to stop Agents / Landlords exploiting people.

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Elmar 13th March, 2016 @ 13:25

To be honest, I think you shouldn't be charging anything at all. I am no longer a tenant, but I used to be when I was at university. Moving into a new property caries with it a lot of new costs (cleaning, supplies, furniture, decorative pieces, bedding, you name it). I have always found it a massive burden to pay around £200-300 every time I moved in to a new property. Especially when I was a student and couldn't afford it.

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dem 23rd March, 2016 @ 21:03

I have a guarantor which earns qay over 16.500 per year..
But the guarantor was once a guarantor for someone else and they left the rent in their name which cost around 12grand which he's paying off..
Will this effect my guarantour credit check when coming to be my guarantor ..
The agency is charging me 320 fee which is a lot of money to throw away if the guarantor fails ..

Just wait landlord could trust tenant on dss.

Please help ..

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Braden Bills 8th July, 2016 @ 12:51

I've been wanting to become a landlord. I just want to make sure I do everything correctly. I didn't even think about checking the credit of my tenants! It makes sense that you would want to do that, just in case you get someone who might not be able to afford the apartment. Thanks for sharing!

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Mandy Thomson 8th July, 2016 @ 13:47

Hi Braden

The credit check will only be a finance report, which is just a snapshot of the applicant's current credit status. You also need to run checks against previous addresses revealed, check with the employer and at least the current landlord, if not the landlord before that.

In addition to this, ask the applicant for copies of their last 3 months bank statements. It's possible to pass a credit check, even with flying colours, but still have a history of rent arrears or be bad with money in general (as I found recently when I was looking for a new tenant).

I'm aware that you're in the States, but landlords in England (though not rest of the UK yet) need to also do right to rent checks (from February 2016) and last but not least, checking tenant history databases doesn't hurt either.

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David B 25th October, 2016 @ 16:40

Has anyone used the free service provided by Rentify?

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karl keep 30th October, 2016 @ 20:00

hi can someone help me I am renting a flat with my wife and we had to use a friend to act as a gurrtour for me as I had a ccj in my name which I have payed off now we payed 6 months rent up front and always pay are rent on time we want to move again but not sure if we can do on are own and just get the letting agent to write us a good reference or would we still need are frined to be are garreture

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Saku 12th August, 2017 @ 15:33

Hi there
I have a question.
I do not have a landlord/Tenancy relationship with him ATM.
He have broken few UK law to make me pay forcefully!
I reported to the citizens advise and the Tenancy relations officer. Now he is very made. He want to make my credit checks story very bad. So bad that I won't able to rent or buy a house. Can he do that?!
What to do?
Thanks for answering if you have an answer to my questions.
Cheer

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