Credit score for renting: landlord credit check — what do they see?

Dealing with the rental market and moving to a new home isn’t super fun at the best of times. Add in the possibility of getting your credit score checked as well and it could get even more stressful. A lot of people don’t realise you might need a credit score for renting a house or apartment in the UK, but we’re here to help you know all the facts and be ready for it if they do. What are landlord credit checks, what do they see, and which kind of checks do they do? In this blog, we’ll fill you in on it all.

Your credit score summarises your credit report, including:

• how you’ve managed borrowing in the past
  
  
• your address history
  
  
• whether you have any ‘financial connections’ like people you’re named on a bill with
  

• or whether you’ve had any defaults or County Court Judgments (CCJs).

A credit check is where a lender, or in this case a landlord, looks at your report to decide whether they’re willing to offer you a tenancy based on your creditworthiness. If you don’t know yours, it’s good to know that you actually have three (not one, like most people think). You can learn more about your credit score in 'Your credit score explained'.

Why do landlords check your credit score for renting?

It may seem unnecessary as renting a flat or a house isn’t exactly like borrowing money. So why do landlords need to check your credit score when you apply for tenancy?

Since landlords are permitting you to live at their property, they may want to check your reliability for the following reasons:

• Risk assessment: Landlords often want to check how financially risky you are as a potential tenant in their property. Checking your report can help them to determine whether you're likely to pay your rent on time.
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• Financial responsibility: Your credit history reflects your previous financial responsibilities and how you handled them. Landlords want tenants who are reliable and can manage their finances. So doing a check can give them an idea of what to expect.
  
  
• Legal requirement: In some cases, landlords are legally required to perform credit checks to comply with housing regulations. They may also need to check that you have the legal right to live in the UK. 

What credit checks do landlords do?

Landlords typically run checks with one of the UK's main credit reference agencies (CRAs) — Experian, Equifax, or TransUnion. They are only able to do what are known as soft credit checks and they must get your permission before they do it.

Soft checks include only information that is already publicly available about you and they don’t affect your score when the checks are made — unlike hard checks which can make it dip temporarily. You can find out more about hard vs soft credit checks here. It’s also worth mentioning that landlords are not allowed to charge you for this process (that would be a breach of Trading Standards).

What do landlords look for in a credit check?

Landlords are mainly looking for what they would consider to be “red flags”. These could be anything that indicates to them that you could have trouble paying your rent on time and staying on top of your finances. However, as landlords only do soft searches on your report, they don’t get detailed information about your credit history. 

Firstly, landlords will confirm that you are actually who you say you are by comparing your name and address with your listed information.

But they will also try to establish if you have a history of late payments or financial trouble by establishing if you have any bankruptcies, defaults or CCJs against your name.

When landlords run credit checks, can they see my previous rent payments?

Your rent payments aren’t automatically shown on your report so there’s no need to worry if you’ve missed a payment here or there. If you’re super on top of your payments though, you might benefit from a rental reporting service to help strengthen your financial history. Luckily, we can help you with that as part of your Loqbox membership. Just tell us how much your rent is and which date of the month you pay it on, and we’ll report your payments to Experian to boost your credit history.

You can learn more about how rent affects your credit score here. 

What is a good credit score for renting?

The answer is that there's no fixed number which guarantees you will be accepted. In fact, landlords don’t see your score. That number’s just for you, to give you an idea of how creditworthy you appear to lenders. It’s the information in your report and your affordability that they use to make their lending decision.

Different landlords may read your history differently, and vary their criteria. But, generally, a higher score will indicate your credit report is looking positive. It’s also possible to be accepted as a tenant with a bad score. 

If for some reason, you’re declined because of your report, there are two things you might want to consider trying. First, reach out to the landlord and ask for more details on what they saw as a red flag on your report. If they are happy to share, this can be valuable feedback for you to take forward with you. 

The second is using Loqbox to start building a banging credit report which shows responsible payments and in turn, gives your score a boost. You can find out more information about it here.