Free Credit Check
Many letting agents insist that you are “credit checked” before you can take on the tenancy of a rental property.
This is not unreasonable as you are entering into a long term financial agreement to pay the monthly rent to the landlord and will need to know that you can afford the rental payments. Private landlords often do not perform this check but the vast majority of established agents will.
What actually happens is you complete their application form and this information is then passed to a credit referencing bureau who produces a credit report on which will be your credit score. It is this score that is often used to determine your suitability to rent a property or indeed to take on any other financial commitment such as loan or credit card.
At the same time they will also take up references from your employer if you are working.
Agents like to charge you for this checking service, with charges reaching 50 - 150 per person, though this is a service for the landlord. In Scotland such charges have been deemed illegal, after all you are paying the rent and if the landlord wants to check you out that’s their prerogative and they should pay for the service. Also, in reality it costs the agency much, much less than you are charged.
There are many online companies who can provide you with your credit report free of charge and we suggest you get one before you start out looking to rent a property.
What is my Credit report?
Your credit report is likely to be several pages long as the more you have re-located and more financial agreements you have had the more pages will be on your credit report. It shows details of all these and current commitments and it also shows your credit score or fico score as it is sometimes referred to.
You might be very surprised at who has been making entries on your credit report as almost any company can submit data to the credit agencies who store this data on you.
When you do your free credit check you can see how many payments have been made late, the addresses you have been located at and who has located you there, any finance loan or credit card that you have taken out OR has been taken out in your name. It will also detail things like broadband, mobile phone or Sky TV contracts, car insurance and home insurance premiums.
Any late payments that you have made will negatively affect your resulting credit score.
There are several companies or credit bureau's that offer FREE credit reports, free fico scores or credit reports as they are regularly referred to. These companies included Experian, CallCredit, and Equifax to name a few.
What is my Credit Score?
The “score” is a number representing your credit worthiness. The higher this number the better credit you have and the better credit rating you have the easier it is to enter into financial agreements and get loans and so forth.
Your Credit Score will not be changed or harmed by any checks you make on your own Credit Report and as you can get this for free it will empower you in your search for a rental property. Knowing you credit worthiness will help you evaluate how much you can afford to pay to rent a property.
Unfortunately different companies give different numbers for your credit score whilst a figure of 600 might be “ok” with one that would be very poor with another.
It must be said these scoring systems and bands do change, and are used with differing weight from lender to lender, and decision to decision.
We suggest you check your credit score with all three of the main players in the market. Also we suggest checking your score regularly if you are taking action to improve your credit, as this will enable you to see the changes you are making if it is important to get to a credit worthiness state so you can rent a property or indeed take on additional credit.
An individual’s Credit Score is not the only thing considered when making a decision to allow someone to rent.
Credit scores and credit reports are there to help verify what you say about yourself because often people lie about their finances when they are considering new agreements. Agencies know this!