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cody
21-09-2011, 20:26 PM
Dear Forum;

A potted account of my situation:

I founded and ran a business for 6 years, we had plenty of success, but the last two years struggled, and the company went into liquidation two months ago. I built up some personal debt in the last two, leaner years. More significantly, I am now liable for a £40k overdraft for liquidated company.

I have found a new job, it pays a livable wage, but I not enough to cover my cc debt repayments and any kind of repayments for the personal gurantee.

So, I am at a crossroads, whether to struggle through and try to meet my payments, keeping a reasonable credit rating, or to default, resturcture, make my life more livable (I have 2 young boys to think about), but have a red credit rating years.

The reason I am posting here is to ask peoples experiences of how their credit rating affets their ability to rent property. My son is reaching school age, and we want to move out of London to a more rural location for him to grow up in, but I am very, very concerned that a bad credit rating will affect my ability to be accepted on a tenancy?

How do letting agents / landlords vet tentants ability to pay? As background, up until today, I have never missed (in ten years) a rent payment (or cc payment), I do have a secure job that pays a regular salary with an employer who can confirm this.


Should I be worried?

many thanks in advance

Cody

mariner
22-09-2011, 00:12 AM
Frankly, Yes. Sight of your credit report will reveal some high value creditors/repayments etc You appear to be tech insolvent, outgoings>income with dependents. Regular job only has to pay min wage and could be terminated within 1 month or less.
If you qualify for LHA (HB) claim it, find LL willing to take DSS and agree to HB payments direct to LL.
Seek free debt advice.
Sorry to be harsh, your circumstances are similar to many these days!

cody
22-09-2011, 08:38 AM
Thankyou for your feedback.

So, some more detail.

My new job will be circa £45k, and has a 3 month termination in the contrat from both sides. It is a stable position.

My partner may return to work part time, and so will have a salary, circa £30k.

My questions now would be;

Will LLs generally accept only one of us (my partner) going on the tenancy? If so, will the lower wage due to being part time be an issue.

If both of us need to be on the tenancy,and my credit rating is seen to be poor, could I pay several months in advance to placate any concerns the landlord may have. My new employer has indicated they may be happy to advance several months of pay, in order to help me.

In the situation that I can negotiate with my creditors and can pay a lump sum, so debts are then written off, will my continued poor credit score still affect LLs decisions on taking us on as a tenant, even if I have no outstanding creditors.

Lastly, will all LLs use credit rating agencies to asses tenants?, or are credit checks more involve contacting employers?

many thanks for any advice provided

Cody

MrJohnnyB
22-09-2011, 08:43 AM
Landlords maybe willing to overlook the issue of credit ratings if you're straight with them and offer a larger deposit or maybe pay 3/6months rent upfront. Can you not consolodate your expensive finance to a cheaper source of unsecured finance?

theartfullodger
22-09-2011, 08:50 AM
Good to hear you are rebuilding your lives...

Credit checks come in various flavours, from cheapo & simple (£8 to LL/agency only - but agencies can and do charge much more..) to comprehensive... e.g. see
http://www.nlatenantcheck.org.uk/
or
http://www.credit-check-services.co.uk/services.asp?gclid=COfBidW8sKsCFYcLfAodqTrBdQ

Many individual LLs will do checks - they are quick & easy..

Speaking personally (other LLs/agencies may/will do different..) having had "interesting tenants" & defaults in the past I now always tenant check, however as long as a prospective tenant told me in advance of possible problems I'd be prepared to look at the letting.

What I really don't like & suspect others ditto is surprises - being told "yeah, go ahead, no probs with a credit check" and finding (say) 3 CCJs.

It might be worth having a chat with landlords/agencies and telling them your position up front/if you get interested in a place.. and see what happens.. You've been in business, lettings are a business and a decision to accept a tenant is a business decision so you'll appreciate the decision making process & that it will be different for different landlords..

I'm checking on a probable tenant right now - she told me there might be probs due to bills missed in the past (good, she told me..) but offered Guarantor father. She came across to me as honest & decent & I'll be doing what I can to do a deal: Dunno if that is wise, these things are always a gamble..

Hope it works out..

Artful

cody
22-09-2011, 11:21 AM
Thankyou for the info, has helped me understand a lot more the processes involved.

Is it always the case that if a couple move into a property, both are required to be on the tenancy agreement, and thus have the credit checks carried out.

Another thought, if I were to say in advance that my credit rating is poor, but provide a letter from my employer and several months rent in advance, would this save the need for the credit check to be carried out (and save myself and the landlord fees for this?0

Cody

Darth Wookie
22-09-2011, 11:58 AM
The prospective salaries you idicate in your earlier posts are far in excess of minimum wage and would, with easy budgeting, clear your debts. I am concerned that your wife expects a part time salary of £30k. That seems very high, by any standards.
Talk frankly to your next landlord. There is no doubt that six months rent up front, and pay the next six months by month four, would make a huge assurance and lead to a long and happy tenancy.

MrJohnnyB
22-09-2011, 12:19 PM
I am concerned that your wife expects a part time salary of £30k.

I am happy for the OP, not concerned!! 30k P/A as a part timer is possible in plenty or professional/specialist fields!

cody
22-09-2011, 18:00 PM
Hi;

My wife was earning 50K, and has been offered to return on 3 day / week pro-rata.

The debt I have (not wife) amounts to ~75k, and so isn't easily or quickly repayable.

I was hoping paying several months in advance may sweeten the deal for a LL, but 6 months in advance may be a push, ouch! I am relying on my caring new employer to advance me, this amount might test his friendliness. Do people really think it will require this much to get around my poor credit rating?

hmmm, moving between states of mild glumness and total glumness.

Cody

midlandslandlord
22-09-2011, 19:03 PM
Landlords maybe willing to overlook the issue of credit ratings if you're straight with them and offer a larger deposit or maybe pay 3/6months rent upfront. Can you not consolodate your expensive finance to a cheaper source of unsecured finance?

Handle that carefully, and I'd say explain the full circumstances.

Personally, I'd treat that as a red flag *unless* all the circumstances were explained, and I'd still want a credit check.

I have an acquaintance who has just been taken to the cleaners because a T used a "six months in advance" ploy to dodge a credit check then did a runner.

ML

cody
22-09-2011, 21:06 PM
ML, did they pay 6 months in advance, and then run after the 6 month period?

I might ask my current landlord for a reference, 3 years without a late payment.

Another idea I have come across on these forums is to find somebody as a guarantor (my elderly parents perhaps, or rich friend). Are LLs generally happy to take a guarantor?

thanks

cody

cody
26-09-2011, 08:38 AM
Ok, interested to hear views on my current strategy, and whether it will help, or percentage chances of it helping.

Visit estate agents in person, with the family, so estate agents can get sense of who we are (a responsible, professional and honest family).

Explain the situation with my previous company and that my credit rating might be affected, but explain I have a new position and things are looking up. (question: Should I do this before or after finding a property we are interested in?)

Offer to provide 3 months deposit, + 2 months rent in advance.

Bring with me a letter from a relative / friend, who is willing to be a gurnator (question, what should be in this letter?).

many thanks in advance

Cody

jta
26-09-2011, 09:52 AM
friend, who is willing to be a gurnator

I know what he means, but I'm trying to imagine a 'gurnator'. Someone with a twisted smile maybe.

cody
26-09-2011, 10:01 AM
ooooops, apologies for lack of spelling jta, written in haste, (an interesting image though, maybe something crossed between Les Dawson and Arnold_Schwarzenegger...)