Am I likely to fail a rental credit check?

Natu

I'm looking to rent for the first time since I was a student, and many of the letting agents that I have been viewing with have said that there is a credit check/application fee. One quoted £100 for this fee - is this amount reasonable (it sounds steep for a credit check!)?

What I'm most worried about is failing the check.. I have a history of credit cards and have 3 active credit cards at the moment. 1 is a 0% purchase which is being paid off and another is a 0% balance transfer. However, I've never missed a payment. I've recently applied for a small loan, too. Are they just looking at whether my score is healthy? Or are they looking at the state of my finances and, when they see I have these cards, will it seem like I am a bad case of credit?

Senior_Paper_Monitor

Rental credit check is quite low level - you should be fine (if you qualify for 0% cards you more than meet the rental check)

Natu

That's reassuring - thanks. I passed the loan check just a few days ago, but I still wasn't sure if the Letting Agents use it as an opportunity to have a look at my credit applications and judge me negatively on them!

JuicyJesus

When I applied to rent last year, I was told they didn't really care about much other than defaults, CCJs and bankruptcy. My credit history is worse than yours presumably is, and I passed.

Don't have much to worry about there mate.

AppleMatt

Former letting agent here!

When the agent is saying they are doing a credit check, this isn't a process that comes back with a yes or a no - generally.

Depending on the size of the company, they will more than likely just order a copy of your credit report - something that will look very similar to what you can see yourself on Credit Expert, etc.

The people there will then consider what's in the report. If they are a really small agent, they'll go on gut instinct after reading the facts, maybe asking for more months up front. A slightly larger organisation probably have internal criteria and procedures to whether or not your report is OK enough.

Larger agents have their credit report system linked to landlords insurance etc. so if your credit report is too messy, the system may refuse insurance, and thus the tenant may be refused.

Beware - I've known agents to take the cash and never credit check anyone! Ask for a copy afterwards, either way.

£100 is about average - does this include your "admin fee"? If you want the honest truth, the check costs the agent £30 or less to request, depending on how many they normally do in a month. This, with "admin" fees and "contract" fees are generally made up fees but are one of the only ways for the agent to make profit, when the competition for landlords is so tight.

In short (ha!) - don't panic. If one comes back saying no, there's nothing to suggest the next will too. But it can get expensive (renting through agents often is!)

Hope this helps, PM if you need me for anything!

Senior_Paper_Monitor

AppleMatt,

That is very much different to my understanding of the information provided to letting agents by the various agency routes available.

My understanding was that you would receive public record content a general score type indication, not specific account information.

My interest (as a mortgage broker paraplanner) is to 'understand the system' only - would you be willing to exchange a couple of PMs on the subject ?

Brgds

SPM

AppleMatt

Hi SPM

Of course, no problem, PM away with any questions

Matt

DVardysShadow

Senior_Paper_Monitor wrote: »

.... My understanding was that you would receive public record content a general score type indication, not specific account information.

Legally, I think the last snippet that a CRA would be advised to include in a credit reference would be a 'credit score', particularly if the scoring was not publicly available - because the 'score' is largely opinion. The information about conduct of accounts is more objective and therefore more easily shared.

Senior_Paper_Monitor

I understand where you are coming from on that DVS - but the handing of account detail to a third party (i.e letting agent) opens up another can of worms.

Senior_Paper_Monitor

From our internal notes ....


Second level credit report access - available to and used by Landlords/Employers etc ...

Also by many lenders too, including approximately 3000 banks, such as Kleinwort Benson, UBS, ANZ Bank and many others, up to 700 Credit Unions, all utility companies such as British Gas, EDF and many more, and various lenders such as the Student Loans Company.

Any company that does not share account performance data with the credit reference agencies is not able to view account history within the searches it undertakes, and therefore the only data that can be viewed, or used in a score card calculation, is public information - basically the Electoral Roll, Insolvency and Court Action elements of your Credit Report.

Because there is less data available to calculate this type of credit score, they are less accurate (in terms of being predictive of future bad debt) and may therefore differ from scores calculated on the full contents of your Credit Report.

Similar scores are sold by Experian to commercial customers under the Delphi brand, by Equifax under the Wescore brand and by Callcredit under the Callscore brand. Each has different score ranges. This type of score is known generically as a 'bureau score'.

Senior_Paper_Monitor

I'd be interested to hear the Experian Representative's view on this if he is on the board tomorrow.