Should A Landlord Do A Credit Check?
As a landlord, you will no doubt wish to do everything that you possibly can to make sure that the new prospective tenant is not going to prove troublesome in any way when they take up occupancy of the rental property. For instance, you hope that they will keep the property tidy and pay their rent on time.
So, what can you do to ensure that the monthly rent will be paid by the agreed date and not have to be troubled with needing to chase up the tenant?
Most landlords will take up references from previous landlords going back over a number of years but not as many will think of carrying out a credit reference search despite the fact that it is an inexpensive process. If you think about it, if you were to apply to a bank for a personal loan as a new customer, they would carry out a credit reference search on you to assess your suitability to meet the repayments. So, why should you not adopt the same process to help ascertain if a prospective tenant can afford the rental that could run into many hundreds of pounds or more each month?
In order to undertake a credit reference search with one of the credit reference agencies you will require the written permission of the prospective tenant. The credit reference agency only charge £2 to provide a report and this will include such information as whether the person is on the voters roll, do they have any County Court Judgements (CCJs), have they defaulted on any credit agreements in the last 6 years and how are any credit agreements being serviced.
The above information should help you assess the credit worthiness of the prospective tenant.
So, yes, a landlord should do a credit check as part of their vetting process. If you don’t want to do this yourself then you may find that a letting agent will do so on your behalf if you are using one.