Credit Checks Address – I have used a credit reference agency to do a check on my prospective tenant and from what I can see the tenant looks entirely suitable. However, the agency have advised caution and not given their full approval stating that the tenant is not listed on the electoral role and cannot be located at one of the previous addresses given. What should I do?
The credit referencing process involves the tenant completing a comprehensive tenancy application form which gives all the background information the landlord or agent needs to carry out checks. It also includes a statement of truth and gives permission to do the checks. The process is usually quick and efficient and can be done on-line.
Not only does the check on the tenant give a credit score (an indication of how well the prospective tenant has been handling their financial affairs) it can include references (previous landlord and employers for example) and part verification of identity – something that’s increasingly important.
Any agency worth its salt will be very concerned to give full approval only to those prospective tenants they are entirely confident about. The overall score or approval rating will be based on several factors and sources of information, the credit score itself being only one element.
Other factors will include the ratio of rent to earnings (can this tenant afford the rent), the quality of references received, and a trawl of several data bases which include debt, County Court Records (CCJs) and delinquent tenant information.
Not being on the electoral role is not considered a serious breach as many tenants, being quite mobile, fail to register, but the inability to trace a resident at a previous address is more serious.
County Court Judgements last for six years and are recorded against postal addresses. Therefore tenants must provide information about their addresses over the previous six years so these can be checked for court judgements.
Where previous address information is not provided, or is incomplete, the agencies will always ere on the side of caution and give a “caution” recommendation. This would also be the case if the credit score is low, or when earnings are insufficient to comfortably cover rent payments. In the latter case it may be suggested that a guarantor is required.
However, most credit reference agencies should be happy to amend their recommendation on receipt of written evidence of the prospective tenant’s residence over the full period of 6 years, at no extra cost.
Agents will always need an unqualified positive recommendation to justify a letting, and landlords will need one if they wish to take out rent guarantee insurance.
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