Why Do Letting Agencies Carry out a Credit Check?

by | May 14, 2021 | Welcome

The formalities involved in renting can be time-consuming and it is not uncommon for certain aspects to take a lot longer than others. Letting agencies are often required to carry out certain checks prior to allowing a potential tenant to sign an agreement in order to confirm that they are a suitable fit for the property in question. This may include reference checks from previous landlords, checking your right to rent in the UK and it is entirely possible that a credit check may be carried out against your name too. Read on as we explain why credit checks are used as a part of the renting process and a few things to bear in mind when filling out the required paperwork…

What is a credit check?

In layman’s terms, a credit check allows a company to glance at your credit report in order to get an understanding of your financial behaviour and history. It will show any credit you have taken out and how well you have managed to pay it back, in particular whether or not each repayment has been carried out on-time. Remember, letting agencies need to ask your permission to conduct a credit search.

Do I have to pay fees for a credit check?

The Trading Standards state that tenants do not need to pay a letting agency in order for a credit search to be carried out against them in preparation for renting. Any agency that tries to do so should be reported for misconduct as the Tenant Fees Act of 2019 placed a ban on such letting agency fees in the private sector and also capped the deposit amount that tenants were expected to pay.

I have a bad credit score. What should I do?

A credit search is an important part of the renting process as the letting agency and landlord need to be confident in a tenants ability to pay the rent and run the household. If you have a poor credit score then be upfront about it and explain your situation as you may still have a shot with a guarantor. With this said, never make a payment until you are certain that you have been accepted as a tenant as failing a credit search may mean that you won’t be refunded.

The prospect of a credit search is enough to put anybody off renting, however they aren’t used in a malicious way. Letting agencies simply need to ascertain your credit history and see whether or not you have had any previous problems paying bills. This doesn’t mean that a poor credit score will automatically make you ineligible to rent, but being upfront about it may help your case. To find out more information about how we use credit checks here at Empanda Properties, get in contact with the best letting agency Altrincham has to offer today.