Tenant Referencing & Credit Check Guide For Landlords


Tenant Referencing & Credit Check Guide For Landlords

One of the most important aspects of being a successful and profitable landlord is choosing the right tenant. Whether you use a letting agent or not, the best way to achieve that is by conducting thorough referencing and credit checks on your prospective tenants.

With so many landlords getting royally screwed over by rogue tenants, particularly in this tough economic climate, I’m still surprised by the amount of jackass landlords that are so utterly cavalier about referencing tenants, or more worryingly, the complete lack of. It’s almost like they want to get screwed (not in the good way).

Needless to say, EVERY LANDLORD should be thoroughly referencing and credit checking their prospective tenants before committing to any agreements.

Table of contents:

What is tenant referencing for?

By following a rigorous screening and referencing process, which includes checking rental history, employment status and credit checks, landlords can significantly increase the chances of avoiding disastrous tenants. The kind that notoriously and effortlessly drain profits, most commonly by falling into rent arrears and/or using the fabric curtains as toilet paper.

While finding tenants quickly to keep void periods to a minimum is on the top of the agenda for most landlords, it shouldn’t be a reason to compromise on quality. We should ALL be trying to source quality tenants quickly, and to be honest, I’m not entirely if that’s possible without thorough tenant referencing.

Unfortunately, many landlords make the following two unforgivable mistakes:

  • Accept the first tenants that come along because they just want the rent to start rolling in ASAP.
  • Don’t bother referencing their applicants because it’s a pain in the ass.

AVOID being that kind of landlord. At all costs.

I would rather keep my property vacant and stomach the mortgage payments than rushing in a tenant that didn’t quite meet the criteria. In the long-run, a cowboy tenant will be much more costly and stressful than a vacant property. Hold out for a tenant that makes sense.

Each and every landlord and agent may have their own way of referencing tenants, I can only speak for myself, so I’m going to share my formula – one that has evolved (and improved) over time – which has served me well over the years. Feel free to replicate, or be inspired and adapt to suit your own circumstances.

Do landlords need to reference tenants if using a letting agent?

If you’re using a letting agent, whether it be an online letting agent or highstreet agent, they will most likely include ‘tenant referencing’ as part of their service, or as an add-on service (which you’ll have to cough up extra for).

By all means use their referencing service, but my suggestion is NOT to completely leave it in the hands of your agent, even if it’s included with the service you’re paying for. You definitely have your part to play when it comes to choosing the right tenant for your property.

While it may not always be possible for every landlord, particularly overseas/long-distant landlords, it’s always sensible to reference and meet any prospective tenants for yourself, and not just rely on your agent’s practises and recommendation.

When should landlords reference tenants?

I found that it’s best to break referencing into three stages!

  1. Pre-viewing referencing: this takes place before viewings, so you only schedule viewings with applicants that meet the minimum requirements.
  2. Post-viewing referencing: this takes place during or after the viewing, so you can decide whether or not you want to move them onto the next stage of referencing.
  3. Thorough Referencing: this is conducted on the applicants that impressed you most during the viewings.

The reason it’s broken down into stages is because it’s not useful or practical to thoroughly reference EVERY applicant, otherwise you’ll end up wasting a stupid amount of time and money.

One of the most annoying aspects of finding a new tenant is the massive time-wasting that comes along with it, especially if you’re not vigilant from the get-go.

If you asked me to tally-up how much time is consumed on average by all the tire-kickers, unsuitable applicants and total blaggers that apply for each tenancy, it wouldn’t be entirely surprising if I’m left with very little faith in humanity.

It can be tedious beyond belief, especially if you get inundated with applicants (which is becoming more and more common as the current rental market continues to grow).

One of the most common mistakes landlords make when processing tenancy applications is granting and scheduling every applicant with a viewing slot. There’s no need to do that. Of course, if you want to needlessly waste a buttload of time, then go for it. But remember, your time is precious.

You should only be scheduling viewings with suitable applicants. Typically, that means someone that is employed and has a suitable salary; someone that can get a guarantor; someone that can provide references; someone that fits the lifestyle of your property.

You can quickly and easily whittle down your list of applicants by initially conducting a soft referencing approach…

Steps to referencing tenants

Step 1: Pre-viewing referencing (Processing Tenancy Applications)

Experienced landlords will typically do one of two things to separate the wheat from the chaff before scheduling any viewings with tenant applicants:

  • Conduct a phone interview with all applicants. I say “interview” for lack of a better word, but it’s never as formal as an interview, it only needs to be a friendly chat. You can download a tenancy application form and run through the questions over the phone (and of course, feel free to add your own pertinent questions).

    This is probably the most telling method, as you can tell so much by how someone conducts themselves on the phone.

  • Email each applicant a tenancy application form, and get them to complete it.

The interview/form should determine the answers to the following questions:

  • Tenancy details: number of applicants, proposed tenancy start date.
  • Tenant’s personal details: tenant(s) name, contact details.
  • Current Landlord: details of current landlord.
  • Referee / Guarantor Details: details of Guarantor.
  • Employment details: current and past employment details, and salary.
  • Occupants: Details of all the people that will occupy the property.
  • Other details: details such as smoking status, pet status.

Trust me, construct a screening process before arranging any viewings – you’ll be surprised and overjoyed by how many idiots and time-wasters you almost met.

In the past, some applicants have actually been disgruntled by the screening process, and it’s sent them running for the hills. That only means the pre-viewing screening process is working, because any reasonable person will understand and happily assist with answering reasonable questions.

Of course there’s nothing wrong with meeting every applicant and getting them to complete the form during the viewings, and that will certainly help with the process of elimination. However, it will certainly mean you’ll be more prone to mingling with a whole heap of time-wasters/unsuitable applicants. It’s your call.

Step 2: Post-viewing referencing!

You can run these checks before the viewing, but I find it’s most practical to do it during or soon after the viewing, because it involves applicants providing documentation. Some applicants may not feel comfortable providing personal information unless they are interested in the property (determined after the viewing), so that’s why you may have to wait until after.

Check Identification

Before you start contemplating whether someone is a potentially suitable tenant or not, make sure they’re actually who they say they are by checking their identification.

Due to a newly introduced landlord legislation, Under section 22 of the Immigration Act 2014, Landlords in England are actually legal obligated to check their tenant’s proof of ID and citizenship to help control illegal immigration. Failing to comply could result in penalties to the tune of £3,000.

However, while the legislation DOESN’T currently apply to every landlord in the UK, you’d have to be crazy not to do it, whether it’s required or not.

Check payslips

Request at least 3 months of the most recent payslips of all employed applicant(s) that will be responsible for paying the rent. This will help verify that they are actually earning what they say they are.

Step 3: How to thoroughly Reference & Credit Check your short-listed tenants!

So after you’ve met [during the viewings] and screened your applicants, you should have whittled down the interested applicants into a cute little shortlist. You might now be left with one, two or a handful of prospective tenants, that you would happily consider letting your property to, congratulations.

The next step is to further reference these applicants to help make your decision on picking the right tenant.

1) Gut instinct

Always meet your prospective tenants, even if you’re using a letting agent.

I personally believe that one of the greatest tools to identity a rogue tenant is by relying on gut instinct. That’s why I’ve thrown it first in the list.

I’m sure a lot of landlords have shown prospective tenants around their property and thought, “Hmm I’m not sure I want these people living here”, I know I’ve thought that on many occasions. From my experience, if it looks like a chav, smells like a chav and walks like a chav, it’s probably a chav.

Unless I’m completely comfortable with my prospective tenants, I don’t bother wasting time on trying to convince myself they’ll result in being good tenants, even if a letting agent tries to convince me otherwise. I firmly believe that a landlord (with common sense) will be more effective at finding good tenants compared to the average letting agent, simply because no one will care about our investment as much as we do. We inherently rely on our gut instinct, while most letting agents have no emotional attachment, so they’ll purely rely on the numbers. There are arguments for both sides, but I can unequivocally say, through my own experience, that gut instinct provides a clearer picture than most other referencing methods.

If your prospective tenants make you feel uneasy, it’s probably for good reason.

2) Use a professional Tenant Referencing / Credit Check Service

Besides from using your own independent referencing protocols and intuition, you should use a professional referencing service which includes a professional credit check. Credit checks look into the financial history and current financial status of an individual, and report back any reg flags, including CCJ’s. Very useful.

The reason you probably won’t want to professionally reference every applicant, but only your final short-listed applicants, is because landlords [in England] have to pay for referencing costs, so referencing EVERY applicant can become potentially very expensive. You want to reserve professional referencing for your final short-list that made it through the viewing process and are still interested in renting your property.

If you’re using a reputable letting agent to manage your referencing, they will use a 3rd party professional referencing service to reference your prospective tenant(s).

A professional referencing service will typically include the following:

  • Identity Check– confirms whether or not your prospective tenant is who they say they are.
  • Financial Check– this will highlight any red flags in a tenant’s financial background (e.g. CCJs and other adverse data) that can provide crucial for determining a tenant’s ability to make rental payments.
  • Tenant Risk Score– this will provide you with a score on the level of risk of letting a property to the tenant/li>
  • Income Reference– this will verify the tenant’s employment and income status, by confirming job title, employment start date, length of employment and salary
  • Previous Landlord Reference– feedback from previous landlords, which will provide a good indication of their reliability

Yes, you will have foraged a few of those details already (if you followed my advice to a tee) e.g. previous landlord references, employers reference etc. during the first stage of referencing. But a professional referencing service will verify all the details, so it will save you from actually having to contact the referees yourself. The only reason I gather those details via the application form is to help me decide on who is worthy of getting through to the next stage, and not necessarily because I plan on doing the verifying myself.

Tenant Referencing & Credit Check services

If you’re not using a letting agent, or if you are, and you’re not using their referencing service (e.g. because it’s too expensive), I’ve listed a couple of referencing and credit check services I’ve used in the past and happily recommend.

Just to let you know, if you do intend to use one of them, they will contact your tenant for consent to conduct a credit check on them! So you may want to give your tenant some prior warning.

Tenant Referencing & Credit Check Services
SupplierNotesPrice
Notes / Includes

Fast Credit Check
  • Results within one hour*
  • Credit check
  • Bankruptcy data
  • Residency & address confirmation
  • Electoral roll checks
  • Alias name search
  • Previous addresses linked

*subject to tenants response times

Price

£7.49
Inc VAT

Normal price: £9.99
More Info
25% Discount Code: PIPBASTR25

Notes / Includes

Full Tenant Referencing
  • Choose who pays (tenant or landlord)
  • 2 working days (on average)
  • Credit check
  • Bankruptcy data
  • Residency & address confirmation
  • Electoral Roll check
  • Alias name search
  • Previous addresses linked
  • Employment verification
  • Income references (verbal confirmation)
  • ID verification
  • Previous landlord references
  • Affordability calculation
  • CCJ search
Price

£18.75
Inc VAT

Normal price: £24.99
More Info
25% Discount Code: PIPFTR25

Notes / Includes

Speedy Reference
  • 1 Working Day (on average)
  • Credit Check
  • Linked Address, Identity & Fraud Information
  • CCJs, Decrees, and other court information
  • Right to Rent Check and Advice
  • Bankruptcy data
  • Electoral Roll check
  • Alias name search
  • View sample report
Price

£20
Inc VAT
More Info
Notes / Includes

Comprehensive Reference
  • 3-5 Working Days (on average)
  • Rent Guarantee Insurance Eligible
  • Credit Check
  • Linked Address, Identity & Fraud Information
  • CCJs, Decrees, and other court information
  • Right to Rent Check and Advice
  • Affordability Rating
  • Previous Landlord Reference
  • Employers Reference
  • Bankruptcy data
  • Electoral Roll check
  • Alias name search
  • View sample report
Price

£20
Inc VAT
More Info

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

Don’t solely RELY on a 3rd party tenant referencing and credit check services (like many landlords do) to determine whether a prospective tenant is suitable, use it to compliment your own due diligence!

Do I have to use a professional tenant referencing service?

Nope.

But from my experience, it’s the easiest and quickest option. Otherwise, you should do the following yourself:

  • Contact employer to confirm employment status and salary
  • Contact previous landlord(s) for references
  • Use a credit check service directly e.g. Experian

3) Visit your prospective tenant’s current home

Granted, this is a bit of a pain in the royal ass, but many landlords do it because it’s extremely effective.

Arrange a visit to the prospective tenant’s current residency, allowing you to assess their standard of living and how they take care of their home. Needless to say, they will most likely make an extra effort to clean the property before your arrival. However, some people generally don’t know the difference between clean and darn right filthy, so they’ll be restricted to their own standards. What they find clean, may not actually be clean. So this method is still a good indicator.

I’ll give you a specific example of when this happened to me (although the example is kind of backwards).

I recently had a tenant vacate, and while we were going through the final property inspection my O.C.D radar went ballistic as I was detecting congealed grime and grease left behind, roaming around in the kitchen. There was also a lot of dirt and cobwebs all over the place.

The funny thing was, during the inspection, my tenants were gloating about how thorough and regimented they are in regards to hygiene, and that’s why the property was left so clean. The husband said, I quote “Tracey (his wife) is so fussy, she’s an obsessive cleaner. You know what they’re (women) are like!”

Yeah, I don’t think so, son.

All I really discovered is that they have terribly low standards and have no actual idea what clean actually means. But that’s just how some people are.

Just to clarify, I don’t think it’s necessary to infiltrate the home of EVERY applicant, only the prospective tenants.

4) Assessing Affordability

Regardless of whether your tenant is in receivership of Housing Benefit or a salary from full-time employment, it’s important to assess whether your prospective tenant can actually afford your property. Essentially, create a ‘risk profile’ for your prospective tenant.

Based on your applicant’s total monthly income (the professional referencing company you use should verify salary/income), assess whether or not you think they can realistically afford your property, including the running costs, and the cost of ‘living life’.

I’ve seen it happen many times before, where a tenant gets totally excited by the prospect of renting a house which they’ve fallen in love with, and not realising that they can’t realistically afford it. Sometimes as a landlord, you need to do the maths for the tenant and make a calculated decision. Tenants are often ruled by their heart, neglecting their head.
If after crunching the numbers, it seems unlikely that your tenant will be able to pay the rent for the long haul, it maybe something to seriously think about.

5) Facebook

Ahh the wonder that is Facebook; probably one of my favourite and potentially most entertaining methods of referencing tenants.

Basically, when someone applies to be my tenant I always look for their Facebook profile, by searching for their name and/or email address, and then narrowing down by location (usually required if I’m searching for a common name). 8 times out of 10 (I pulled those odds out of my arse, but they seem realistic enough), the applicant has a Facebook profile, giving me the opportunity to get a snapshot into their life. If lady luck is on my side, the profile will be public, allowing me to view the entire visual catalogue of the applicant’s life.

I’ve actually refused a tenant in the past based on what I saw on their Facebook profile. You can read about that delightful story here, The Results Of Referencing Prospective Tenants On Facebook.

Perhaps not the most orthodox or reliable of methods, but it can provide tremednous insight if the opportunity is available. That said, over the years this method has actually been very useful, and becoming increasingly effective. Most people seem to be leaving behind digital footprints left, right and centre, and most of those grubby prints are smeared across Facebook.

Seriously, try it. Look up your applicants on social media.

Other points to consider when referencing tenants

Landlords in England: You CANNOT pass on the costs of referencing/credit checks to tenants

I already touched on this point.

On 1st June 2019 the “Tenant Fees Act 2019” came into force, which is a legislation that focuses on banning and restricting letting agents and private landlords (in England only) from charging tenants with certain fees, which includes referencing fees and credit check fees.

So if you’re a landlord in England, from the 1st of June 2019 you will not be able to charge your tenants for any form of referencing. If you do, the charge will be deemed unlawful, and you could face a hefty financial penalty.

Don’t stop looking for tenants until the deal is signed!

Word of warning: do NOT stop looking for tenants! A ridiculous amount of landlords make this fatal mistake, so I urge you not to fall victim, because it may unravel into a recklessly expensive mistake.

Do NOT under any circumstances stop looking for tenants until your new tenant has:

  • Passed referencing
  • Provided a Guarantor that has also passed referencing
  • Paid deposit in full
  • Paid first month’s rent in full
  • Signed contracts
  • Has officially moved into the property (strictly speaking, point 4 should not even occur unless 1-3 have been completed).

Until all the above is fulfilled, keep on taking viewings and processing applications.

Tenants frequently delay move in dates or pull out from the arrangement all together, and most of the times there’s little landlords can do to recoup that lost time/money.
Don’t take your tenants word or allow them to earn your trust at this stage, despite how much they assure you they are interested and intending on moving in, it means nothing until they actually do it. Absolutely NOTHING!

Referencing Guarantor

While you don’t need to be as thorough, you should still also reference your prospective tenant’s Guarantor. I usually just purchase one of the above referencing packages.

It’s important that the guarantor is also creditable, otherwise there’s no point in using a Guarantor in the first place.

Rent Guarantor Insurance (RGI)

RGI is a type of insurance that protects landlords against loss of rent e.g. if a tenant falls into arrears. In the event of an arrears tragedy (which is ridiculously common, unfortunately), the insurance company will cover the loss of rent. I’ve personally relied on a Rent Guarantee policy to reclaim loss of rent after my stupid, inconsiderate tenant fell into arrears.

RGI won’t necessarily prevent you from recruiting a bad tenant, but it will ease the pain if it happens!

Personally, I think these rent guarantee policies are extremely useful and worth the money, especially when you’re dealing with new tenants. To be honest, they’re not terribly expensive policies, I pay around £120 per year, per tenancy.

If you’re interested in learning more (which I recommend that you do), you can read my RGI Guide.









Download your FREE Download Landlord Referencing Checklist

Sign up to the Landlord Newsletter to download your FREE Download Landlord Referencing Checklist so you can avoid rogue tenants. You'll receive a download link, along with regular updates via email, which will include notifications of every time I publish a new awesome blog post, landlord tips, advice, discount codes and exclusive offers!

The form can be modified to suit your requirements/needs.

Your personal information will *never* be sold or shared to a 3rd party. By submitting your details, you agree to our Privacy Policy.

57 Comments- Join The Conversation...

Showing 7 - 57 comments (out of 57)
The Landlord Avatar
The Landlord 10th November, 2011 @ 11:39

Hi guys,

Ha, these suggestions are all getting borderline creepy, but I like it :)

@AUS
Agreed, nothing is foolproof. And the steps I mention do simply what you said, limit potential risk.

In regards to LinkedIn, it's no way near as popular as Facebook, that's why I never mentioned it. But still worth a shot.

@NS1
Yeah, Googling names/email addresses some times brings up results, I've also noticed that. But I still think Facebook is the most reliable right now.

@Armin
Never thought of using localised forums. But I like the concept of your suggestion. I've never looked into forums to try and find tenants- how popular are they exactly?

7
Guest Avatar
Armin 10th November, 2011 @ 11:43

@The Landlord

The Sheffield forum is *extremely* popular, but I think it's mostly an aberration, i.e. an unusual exception. In theory other locales in the UK might have similar web communities, but I haven't really seen any. Which might be due to me only really bothering about the place where I live and the place where my BTL is.

8
Guest Avatar
George / makeurmove 10th November, 2011 @ 13:47

Make sure the previous landlord is the real deal!

* Get a utility bill from their previous address.
* Do a land registory check to find previous landlord.
* Independently obtain landlords contact information

George
http://makeurmove.co.uk

9
Guest Avatar
John Tsigarides 16th November, 2011 @ 13:54

Excellent post and spot on with my own opinions and experiences. Facebook has frequently made me question prospective tenants, whom on first impression seemed OK, but then after investigating Facebook, all photos were of them getting consistently smashed and their ‘post language’ was very Chavy with loads of F'ing this and that!

My personal favourite experience though was from a middle-aged couple who wanted to rent a house from me. He was apparently a private language tutor and she was a mobile hairdresser. They were very well spoken but something just didn't add up about them, so just out of chance I put both their given mobile numbers in Google.....It came up with links to private escort directories for him and her!!! Needless to say, they didn't get the house!

10
Guest Avatar
David Booth 10th December, 2011 @ 14:18

If you dont want to be screwed over by your DSS (LHA) tennant not paying you we have the answer visit www.taskerpaymentservices.co.uk see what we do and you wont have the hassle of chasing your tenant for the rent!

11
Guest Avatar
emma 16th January, 2012 @ 10:53

Does anyone have any experience of rent insurance ?

12
Guest Avatar
Armin 16th January, 2012 @ 11:10

Emma,

I have been trying to get rental shortfall and legal insurance for a while now. The reason why I find it difficult is because the insurance will only cover me for those things if they consider the tenant to be very low-risk. The insurance company insists I use an accredited tenant referencing service (in my case FCC Paragon), but those referencing agencies will not give a reference unless the applicant is pretty much bullet-proof. I.e. substantial income, no bad debt, no CCJs, no bankruptcy within the last 5 years etc etc.

And each tenant/guarantor referenced costs £42. I have blown a decent chunk of money on such checks so far and I'm starting to think that it might not be worth while.

Hope that helps you.

13
Guest Avatar
emma 16th January, 2012 @ 14:51

Thanks Armin, I though they sounded too good to be true. If I hear of a sucessful tried and tested service I will post it on here

14
Guest Avatar
George 17th January, 2012 @ 09:44

Also worth remembering, it is probably a lot easier for tenants to find YOU.

15
Guest Avatar
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!

16
Guest Avatar
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

17
Guest Avatar
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.

18
Guest Avatar
daryll 20th January, 2014 @ 00:23

hi guys im I tenant trying to find a bigger house in the medway area in 11 years ive never been chased for my rent ive always tried to work with the landlord fixing problems myself with there consent always improving things here and there and in the long run it only benefits the landlord(s), were currently having to jump through hoop after hoop to please referencing companies affording my rent isn't a problem but it getting someone to understand that not all tenants are bad, I willing for anyone to do checks for anything they I would happily give a prospective new landlord my facebook account details, bank statements, guarantor details, current landlord contact details, Experian credit report, but for those few genuine people its is shadowed by those who abuse house and the trust given when they rent a property which is making it harder for people like me and my wife with two girls and one on the way harder to be accepted by landlords looking for tenants that are acutally going to respect and take care their property rather than destroying it, I just wanted you guys to see it from my prospective, but I do agree with your previous comments as it would make it better for families like us to rent somewhere we can be happy

19
Guest Avatar
emma 20th January, 2014 @ 10:28

I think if the lwas were changed regarding the eviction of bad tenants then more landlords would take more risk. I for one do not take any risk and if I get one sniff of something not right then I stop the application process and re-advertise. I'd rather an empty house than a problem tenant.
I would say though that the tenancy application is no different really to a mortgage application.
@ Daryll. If you tick all the right boxes I am sure you wont have any problems finding the right house. Good luck

20
Guest Avatar
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.

21
Guest Avatar
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??

22
Guest Avatar
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.

23
Guest Avatar
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

24
Guest Avatar
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 ?

25
Guest Avatar
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.

26
Guest Avatar
Elaine 1st November, 2014 @ 15:25

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

27
Guest Avatar
Marie Cherry. 17th November, 2014 @ 20:30

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

28
Guest Avatar
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

29
Guest Avatar
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.

30
Guest Avatar
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.

31
Guest Avatar
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.

32
Guest Avatar
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 ..

33
Guest Avatar
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!

34
Guest Avatar
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.

35
Guest Avatar
David B 25th October, 2016 @ 16:40

Has anyone used the free service provided by Rentify?

36
Guest Avatar
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

37
Guest Avatar
paddy 21st April, 2017 @ 11:14

landlord letting for second time bad experience first time with an agent going it alone this time. question: i have prospective tenant, I'M DOING ALL THE ADVISED CHECKS ETC i have told him that the maximum time to rent is 3 years after which we move back into the property can i establish this in a legal way so that there is no misunderstanding when that time comes.

38
The Landlord Avatar
The Landlord 21st April, 2017 @ 11:25

@Paddy
There's nothing different you can or need to do, you will need to terminate the tenancy as normal.

The legal way (based on common and general circumstances) is just to give the tenant a minimum of 2 months notice before you want him/her to vacate- assuming the tenancy isn't in the fixed terms. So just ensure you don't renew the tenancy with fixed dates that exceed the date you need the property by.

I would just offer a 6 month tenancy and allow the tenancy to roll onto a periodic tenancy after that. Then you'll have a month-by-month contract, and you can just serve notice whenever (but with 2 months notice).

There's nothing else that needs to be done. Hypothetically speaking, even if there was something else you could do, the tenant could just remain in the property if he wanted to be stubborn about it... and you'll have to get the tenant evicted anyways.

39
Guest Avatar
Malcolm 23rd June, 2017 @ 21:02

Hi. I'm currently letting out my old family home to a young lady who is threatening to leave with 4 months left of her agreement.
Problem is her guarantor is in Scotland and I've heard that it's near impossible to chase them north of the border?

Any help please?

40
Guest Avatar
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

41
Guest Avatar
Shahriar Kordestani 21st September, 2017 @ 07:15

I have a few houses in london and getting charged a lot by agencies so i would like to start finding tenants and refrencing myself but the most secure method.

42
Guest Avatar
Emma 4th November, 2018 @ 04:30

" I guess it’s the same when it comes to women and shoes."

Can I politely suggest you revise?

Seemed like a good article but that's some archaic sexism you've got going on there.

43
Guest Avatar
Joe 5th November, 2018 @ 05:59

Does anyone have experience of using Tenant Verify?

44
Guest Avatar
M&L 17th November, 2018 @ 03:40

Recently bought a new property and stumbled across your blog! It's really informative and very helpful expecially for novice landlords like myself.
As I'm currently trying to find tenants (quickly) for my property I've posted a few ads and generated a few prospects.
I will be sending them a tenancy application form and depending on their answers (or even if they come back to me!) I will shortlist a few to start with a viewing.
Now my question is, at what point in this process does landlords conduct the:
a) employment reference check?
b) credit check?
c) criminial check?
d) current landlord check?
e) ID check?

Is this normally after the viewing and a verbal let is agreed, but before signing the tenancy contract?
Or can you actually do all of this before? What's your advice? Welcome anyone else's advice too!
I travel very often so I have to plan my time very carefully.
Thanks all! :)

45
The Landlord Avatar
The Landlord 17th November, 2018 @ 09:47

Hi M&L,

Glad you have found the blog useful :)

Other landlords may do it in a different order, but I do it in the following:

I ask applicants to bring ID during the viewing, or ask them to send me a copy with the tenancy application form. Reason being is that you want to ensure 1) you're credit checking the right person and 2) they have a legal right to rent in England (assuming you're a England based landlord)! Otherwise it could be a waste of time and money running the extra checks.

Once identities have been confirmed, you can start narrowing down your list of prospective tenants based on their application form. With the remaining few, it doesn't really matter what order you do a - d, as long as they're done before agreeing to and signing a tenancy.

Best of luck!

46
Guest Avatar
Jay 18th November, 2018 @ 11:25

Hello Landlord - I'm a big fan of your website. Its both informative and entertaining.

Posting to let you know the house shop code above does not give the basic check for free anymore. It still discounts to £5 which is not too bad....but not quite as good as free!

Cheers

47
The Landlord Avatar
The Landlord 18th November, 2018 @ 18:44

Hey Jay,

Many thanks, appreciate it :)

Strange, I'll get in touch with The House Shop and see what they say about that. They never actually informed me that the deal had expired. Thanks for the head's up!

Cheers!

48
Guest Avatar
Paul 2nd January, 2019 @ 13:25

I have been a fan of this site for a while, so much useful info I am hoping someone here can help me.

I have had a tenant from hell and wondering if there are any sites that record details of such tenants.

I have been told that GDPR makes this impossible, is that true, I feel like some PAYBACK!

49
Guest Avatar
Allyson 16th April, 2019 @ 14:39

I considering letting a Charity owned cottage to a nice young couple with 3 year old daughter who have been in Poland for 2 years and returning to rent in UK. They are both self-employed - a car parts buyer and seller and bookkeeper. What/how to do credit check is my question, other than 3 months bank statements, copies of business accounts?

50
Guest Avatar
Claire 24th May, 2019 @ 14:18

Is it just me or is getting an employers reference like blood out of a stone on Mars.
The HR team seem afraid of the phone and never take my call nor reply to my email. Look its not hard either the guy works there or he doesn't!
What Am I doing wrong?

51
Guest Avatar
Melinda 14th June, 2019 @ 12:22

You say keep on with marketing and viewings until the agreement is signed but we are with Openrent who delist the property as let agreed the minute you take a holding deposit. We let with m first time and all was good and very easy. This time a tenant messed us around. The reference only checked the job she was in and did not discover what she'd told us at the viewing that she was moving to the area to start a new job the day the tenancy was due to start. She passed reference with a mid range range score but the report does she'd been in her current job and rental less than 6 months. Having passed the referencing checks, she took offence when we asked to see her new work contact and salary details and asked us to return the deposit or reduce the rent, so we returned the deposit and ditched her. We had been off the advertising portals for 2 weeks while this was going on and when we went live again we were several pages down in the listings and still looking for a decent tenant having had several viewings who have all messed us around. We've just reduced the rent but any comments and advice please?

52
Guest Avatar
shazza 14th June, 2019 @ 13:59

I too am with Openrent and have used their comprehensive referencing this time. They were unable to confirm work references - which I did myself by ringing the companies direct and when I rang to advise the reference company, they seemed uninterested. I asked if I could see the credit report of the applicants but they said not until the rest of the referencing has been done. Surely if I am paying for the referencing to be done then the available information should be given to me as soon as they have it. Any landlord needs information to base their decision upon and if the credit reports are available this could help save time in finding new tenants. Now I fear I will be waiting another week to get the credit reports which if available to me now would help me decide as to whether to continue along with them. Time is money - especially with a vacant property.

53
The Landlord Avatar
The Landlord 14th June, 2019 @ 14:12

@Melinda
I can completely sympathise.

While I can understand why OpenRent remove listings once a holding deposit is taken, I can also recognise the impracticality of it when deals fall through.

I sent an email to OpenRent based on your experience.

I personally don't take a holding deposit. So I guess that is one solution, so the listing always remain live. But that's precisely why I don;t take a holding deposit, because I keep looking for tenants until 1) deposit is paid 2) first months rent is paid 3) tenancy agreement is signed.

Is your asking price competitive?

54
Guest Avatar
kim 21st June, 2019 @ 19:07

I always ask to see the prospective tenants' last 6 months original bank statements before doing any referencing. It is often very revealing - bounced cheques, constantly overdrawn etc. The dodgy ones always make excuses why they should not have to provide them, so you can rule them out straight away. I also get them to authorise any agents to release a copy of their application form to me as this also reveals some useful info. I find it is increasingly difficult to find decent tenants these days.

55
Guest Avatar
Benji 21st June, 2019 @ 22:07

@Kim,

"I always ask to see the prospective tenants' last 6 months original bank statements before doing any referencing. It is often very revealing - bounced cheques"

What the kind of tenant writes a cheque nowadays, let alone bounces them?

56
Guest Avatar
Simon 22nd September, 2019 @ 16:54

Interesting article but one type of prospective 'tenant' is the rent to rent type of person. That is people who want to rent properties then cram as many people in as they can so they can sublet at an inflated price.

These people could potentially fly through various credit checks because they're probably really wealthy. Employment checks could expose some but it seems possible they may have jobs too or claim to be self employed (which I suppose they sort of are).

Just wondering because I've just been visited by two people who seem great on paper as tenants but also a perhaps a bit too good to be true. I suppose my gut instinct is saying 'no' here but I'm concerned that maybe I'd be turning my back on potentially great tenants through being paranoid.

Interested to hear other's views or experiences with rent for rent people.

Great web site by the way.

57

Please leave a Comment...

Nobody

Nobody

Landlord

Landlord

Tenant

Tenant

Agent

Agent

Legal

Legal

Buyer

Buyer

Developer

Developer

Enthusiast

Enthusiast


Your personal information will *never* be sold or shared to a 3rd party. By submitting your details, you agree to our Privacy Policy.

Popular Landlord Categories

Tweet
Share
Share