Student wanting to rent, does my overdraft affect me?

battlingpig

Hello, I’m a student just about to start my second year of uni. I have a student current account, and have a no interest overdraft limit of £1000 which i have spent.
I am looking to rent a flat which requires a credit check. Will the fact that my overdraft is -1000 affect my credit check, and will it stop me from being able to rent.

I was reminded by my bank to put some money into it so the account wouldn’t be held. (I don’t know what this means) I did anyway and have agreed to transfer my student loan into my account at the end of September. When i signed up for this account I had no idea that I had to put £250 in per quarter.

I am thinking about opening another student account with another bank, would I be able to do this? I know it’s the wrong thing to do, but money is tight.

Thanks.

Also, what is a [FONT=&quot]'default'?[/FONT]

tbs624

Welcome as a newbie. LLs of student lets tend to ask for a guarantor - do you have anyone who would be prepared to act in this capacity?

A default is when you have failed to meet any form of repayment commitment, usually by missing a series of payments. A default shows up on your credit record for 6 years. Have a look on MSE Martins section on credit ratings on the main part of the site.

You may find it helpful to look up at the top of the Board at Joe81's sticky on all things renting - help avoid some pitfalls. You may want to check whether the property is registered with the Uni Accomms office as usually the LL has to sign up to a code of conducts and many Unis insist on elec safety certs as well as the standard gas safety cert.

battlingpig

thanks for the reply. I had a good read through the guide. I wouldnt be able to get a guarantor, but my friend who will be sharing could. Do they need a guarantor per person sharing?
do you know if my overdraft will affect the credit rating?

tbs624

If you have kept to the terms of an agreed overdraft it can actually improve a credit rating, but the checks done by LLs/LAs are not just about looking for whether you can keep to financial agreements, or have previous defaults or CCJs , they are about allocating a affordability rating.

So it's essentially (a) does this person have a good track record with handling their finances and (b) is this person likely to be able to pay the agreed rent for the term of the tenancy.

It is usual for each T to have their own guarantor (although it could be the same person acting for both) but you also need to understand about contracts under which you have "joint & several liability". What this means is that any or all of the Ts may be held reponsible for any shortfall in the rent and/or damage to the property/contents that may need rectifying.

You may be better using a LL who self-manages their properties rather than going via an LA because (a) such LLs tend to show a bit more flexibility and (b) you don't get slammed for spurious admin charges

In your circumstances the LL may want you to pay a term's advance rent as soon as your loan comes in so that you haven't had chance to disappear down the SU bar with it before the rent is paid out. It would obviously help convince your LL that you are likely to be reliable if he knew that you had a p/t job lined up too.

Use your Uni accomms advisers to check through any paperwork for this tenancy before you sign it , given that you have missed some of the bank info prior to signing up for your bank account ( when they say they'll put a hold on your a/c btw it means that you can't access the o/d facility until you've complied by paying in the minimum amount that is required for the a/c to be operated.)

Don't pay out a holding deposit or credit check fees until you've discussed your financial situation with the LL /LA. If you give them the right info they should be able to tell you at the beginning whether you will be likely to fulfil their tenancy criteria.

There is also a student board on the forum which may be able to offer other suggestions.

vicstick86

If youve just taken the money from the overdraft and not paid anything in, ie. your loan. You could well have a bad credit rating. My housemate did this and was made to pay it all back quite quickly whilst still at uni!!!

Its in the small print off all student bank accounts that you must pay in to it your loan!!! And opening another and is considered fraud!

So be very careful of using your overdraft as an extra money without thinking of filling it at least 3 times a year! You could end up with a terrible credit rating!

Most student house shares dont require a credit check as they know students will be skint, and often have bad credit.

Private lets will, and often wont rent to students full stop.

I rented privately whilst I was a student, and had 2,500 overdraft, but because my loan and my wages went in every month I had a good credit rating.

tbs624

Good tips on student bank accounts

vicstick86 wrote: »

Most student house shares dont require a credit check as they know students will be skint, and often have bad credit.

Many student LLs *will" run basic credit checks because although they can and will work with "skint", they don't want a skint student tenant who also has a couple of defaults and a CCJ as well.Those who don't credit check the student T will be likely to insist on a guarantor. If LLs are using Rent Guarantee policies they will be obliged to undertake appropriate checks on* all* Ts.

vicstick86 wrote: »

Private lets will, and often wont rent to students full stop.

Student share houses still come under the heading of "private lets": it's "private" as in not Housing Association, Council Housing, Uni provided accomm etc

Fire_Fox

battlingpig wrote: »

Hello, I’m a student just about to start my second year of uni. I have a student current account, and have a no interest overdraft limit of £1000 which i have spent.
I am looking to rent a flat which requires a credit check. Will the fact that my overdraft is -1000 affect my credit check, and will it stop me from being able to rent.

I was reminded by my bank to put some money into it so the account wouldn’t be held. (I don’t know what this means) I did anyway and have agreed to transfer my student loan into my account at the end of September. When i signed up for this account I had no idea that I had to put £250 in per quarter.

I am thinking about opening another student account with another bank, would I be able to do this? I know it’s the wrong thing to do, but money is tight.

Thanks.

Also, what is a [FONT=&quot]'default'?[/FONT]

If you read through the student board you will see a lot of students open a current account, don't fund it regularly and suddenly have their overdraft facility withdrawn (you have a couple of weeks to pay it back). Read the terms and conditions carefully, a student account is usually meant to be your main or only current account. If you open a second account again there are many examples of students who have had their overdrafts withdrawn and lots of charges added.

Absinthe_Fairy

This is interesting. When I was at uni I didn't have to provide a guarantor for my student house and wasn't credit checked. In fact I don't know anyone who was. I only came across the world of guarantors and credit checks when I began renting as an employed person.

vicstick86

Yeh see neither did I thats why I gave the advice! I just handed over a deposit and moved in.
Just to clear it up, by private rents I meant ones not affilated with the uni, our uni provides a large database of landlords they register who provide to students. They call renting outside of this private landlords.

tbs624

vicstick86 wrote: »

....Just to clear it up, by private rents I meant ones not affilated with the uni, our uni provides a large database of landlords they register who provide to students. They call renting outside of this private landlords.

I can see where the confusion comes from ! The LLs who are listed with the Uni *are* simply private sector LLs who have registered with the accomms office and who generally agree to abide by a code of conduct that has usually been drawn up by the local LL Association, the local Council Private Sector Rentals Officer and the Universities themselves.

orangeslimes

In my time renting I have never been credit checked and never needed a guarantor.
When I rented through an estate agents I provided a reference from a halls of residence and a uni tutor and no guarantor- and paid no admin fees either.
Then rented privately and I guess my reference was that I was a friend of the previous tenants.
Now I am not a student but guess I am living in a studenty flat and I have provided no references and not even met the landlord (but am assured he is a nice guy and he has been round a couple of times to fix stuff so don't envision any problems)

So I find reading about paying all your rent up front because you are a student etc quite surprising and there were very few landlords that required admin fees (but maybe that is just where I was) so if you are lucky you can probably get away with not having any checks. Anyway I don't see why using your overdraft should stop you being able to rent but obviously you have to be able to pay the deposit etc...