Will Brother's Financial History Prevent Him Renting?

DairyQueen

My brother has a lifelong history of financial problems which culminated in a crisis when he divorced a few years ago. At that time he had debts, no assets, commitments to child support and (I'm sure) a very poor credit score. He was (and is) employed but his income has been insufficient to house himself in addition to paying his other commitments. He has lived with family members at a reduced rent since he separated.

He is now in his late 50s and, for the last year, has been living with our elderly parents. His ex lives in the former family home (mortgage in bro's name but ex pays the mortgage) with their two young children. Bro's debts were restructured 3 years ago and, to our knowledge, he hasn't defaulted on any loans (or taken out new ones) since then. I don't think his ex has ever defaulted on the mortgage payment. He no longer uses a credit card but has been regularly repaying his historical credit card debt. He has a bank account and may have an overdraft (he is reluctant to discuss details of his finances).

Sharing a home with our parents is becoming untenable for many reasons and they would all benefit if bro lived independently. Parents have suggested that he rent a small property but parents and I are unclear whether he would be able to do so given his credit history. Parents (both retired) are willing to act as rent guarantor. As bro is unable to manage his own finances parents would prefer to pay bills on his behalf (and have him pay them a single monthly payment). We believe that he has sufficient income to support himself now.

I would be very grateful if the knowledgable people here could answer the following:

1) How long will it take to repair a damaged credit record? Is 3 years of non-default sufficient for bro to pass a letting agency's credit check?
2) If he failed the check would my parents be accepted as a guarantor? Parents have impeccable credit history - mortgage-free home, no debts, pension income, credit card cleared monthly, etc.
3) Would a landlord/utilities companies/council tax allow bills to be paid directly from my parents' bank account even though they wouldn't be living at the property?

Your advice would be very much appreciated.

DCFC79

Do your parents realise what is entailed in being a guarantor ?

It depends what a letting agent looks for, I don't know if they just look for ccj's for example, does this help http://www.experian.co.uk/consumer/questions/askjames370.

Credit scores aren't seen by anyone so don't worry about that.

Maybe 3 years would be enough for renting.

DairyQueen

DCFC79 wrote: »

Do your parents realise what is entailed in being a guarantor ?

Yes, they understand the responsibility. They are clued-up on most financial matters but debt management is an exception.

I couldn't get the link to work but I think we may approach the letting agency and discuss with them. See what they say. Bro has consistently paid his rent to family members over the last, few years. Never missed a payment. He just finds budget management difficult.

Thank you for replying.

The_Real_Cheddar_Bob

As an ex bankrupt i had a couple of issues with letting agents.

I wrote a letter to several disclosing my income, employment status and offering multiple years of bank statements proving i could afford to pay rent.

The majority were happy with what i put forward, and from a landlords perspective, squeaky clean credit doesn't mean tenants will pay, but i guess reduces the risk from a commercial sense.

A landlord would not need to know about who pays for your brothers bills, those providers wouldnt care either,

molerat

Any credit check by prospective landlords should only see bankruptcies and CCJs. If none of those are shown then there should hopefully be no problems. The agents should not need to be made aware of anything - just ask what their criteria for letting is and explain he has no history of renting as he has been living with family since a failed relationship.

As long as your parents' are aware that they would effectively be writing an open cheque to the landlord !

DCFC79

DairyQueen wrote: »

Yes, they understand the responsibility. They are clued-up on most financial matters but debt management is an exception.

I couldn't get the link to work but I think we may approach the letting agency and discuss with them. See what they say. Bro has consistently paid his rent to family members over the last, few years. Never missed a payment. He just finds budget management difficult.

Thank you for replying.

Apologies for the link, not sure what happened there.

If he finds budget management difficult I'm sure there's ways to make it easier.

I was justill checking the parents knew what is entailed as some posters who have been guarantor have posted on here and didn't have any idea what guarantor entailed.

Hope your brother finds a place.

DairyQueen

DCFC79 wrote: »

I was justill checking the parents knew what is entailed as some posters who have been guarantor have posted on here and didn't have any idea what guarantor entailed.

Hope your brother finds a place.

rjwr wrote: »

A landlord would not need to know about who pays for your brothers bills, those providers wouldnt care either,

molerat wrote: »

Any credit check by prospective landlords should only see bankruptcies and CCJs. If none of those are shown then there should hopefully be no problems. The agents should not need to be made aware of anything - just ask what their criteria for letting is and explain he has no history of renting as he has been living with family since a failed relationship.

As long as your parents' are aware that they would effectively be writing an open cheque to the landlord !

Thank you all for your responses. Being a guarantor is a big responsibility and I am hoping that it won't be needed. By acting as intermediary between landlord and tenant we would know immediately if my bro was having problems. If bro missed any payments then it would be payments to us - not to the landlord and/or utility companies.

My bro has no CCJs and has never been bankrupt. His credit card debt was restructured a few years ago and the interest was frozen. To my knowledge he has not missed any payments since then (but I don't know for sure). Also, to my knowledge, this is his only current debt.

Fingers crossed that all goes well for him. He deserves a break.