What Is Your Credit History?
If you want to rent a property in the UK, the vast majority of all landlords and letting agents will require you to give permission to conduct a credit referencing search against you.
Your credit history provides a variety of information to landlords and letting agents and is primarily done to predict whether you are going to be a tenant who pays their bills on time, or whether you will make late payments, or fail to pay at all.
Landlords can ask credit referencing agencies for details about your past credit history, including missed payments, unpaid debts, county court judgements (CCJs), and Individual Voluntary Agreement (IVA) or bankruptcy orders against you. Landlords will also be able to see your Electoral Roll listings.
However, this can be a problem for people with a bad credit history through no fault of their own (such as financial difficulties due to illness or redundancy or being young and never taken much credit before).
So if you’re facing difficulties finding a property to rent because of a bad credit history, we appreciate your struggles and have some top tips to help you improve your credit score and enable you to move into a nice place you can call home.
Why Is My Bad Credit History Important?
Your credit history is important because it plays a big role in deciding whether you would be a suitable tenant for the property you are applying for.
Your credit search reference will reflect best on you if there is no evidence of any court records such as CCJs, IVAs or bankruptcy orders (as they are usually a sign of major financial difficulty), and you have an Electoral Roll listing which is registered at all of your previous addresses.
Missed or late payments will not show on the public credit history that landlord’s access, so if this is the only problem with your credit history, you may be okay.
However, if you are signed up to a Rent Reporting scheme, and you have missed payments, or are in arrears, this will be visible to your prospective landlord and could damage your chances of your application being accepted.
How Can I Improve My Bad Credit History?
Dispute Any Incorrect Records
If you are concerned about your bad credit history, you can check online for free with the main credit referencing agencies; Experian, Equifax, or Transunion, and find out exactly what the problems are.
It is best to check your credit history on all three agencies, as different creditors will report to different agencies.
If you notice a mistake on your credit file, you can add a note to explain why a debt wasn’t paid or why you are disputing the debt (for example, a case of mistaken identity and you didn’t buy the product or service).
You can also contact the credit referencing agency, or the creditor directly to ask them to fix it. You should receive a response within around 30 days.
If you can’t reach an agreement with the creditor, you can contact the Information Commissioner’s Office (ICO) who are impartial and investigate complaints about credit file disputes.
Make Sure That Old CCJ’s Are Removed
If you have had a CCJ, IVA or bankruptcy orders and six years have passed since the date of issue, it should not appear on your credit report anymore. If you notice that an old CCJ, IVA or bankruptcy order is still on your credit file, contact the credit referencing agency to correct this.
Close Old Shared Bank Accounts
If you have taken out a mortgage, a loan, or even opened a bank account with someone, they will be listed as your “financial associate”. If this person has a bad credit history, it can damage your credit score, and therefore it is very important to close any inactive accounts that you share with them.
Once you have closed the account, you can request that the credit referencing agency disassociate you from the other person.
If you are married, or in a civil partnership, you aren’t automatically affected by your partner’s credit history – there credit history only becomes relevant to yours if you have a joint account, loan or mortgage with them.
Get Your Current Rental Payments To Improve Your Credit History
Another way to boost your bad credit history is to get your current rent payments to contribute to your credit score. You can do this by signing up to one of Experian’s partners such as Credit Ladder or Canopy and connect them to the bank account from which you pay rent (granting read-only access). It uses Open Banking to verify and monitor rent payments, so you need to be comfortable sharing your details.
Paying your rent regularly, and on time each month helps boost your credit score relatively quickly so it’s definitely worth taking the time to set it up whilst you are looking for your next home.
How Can I Rent With A Bad Credit History?
Use A Guarantor
A common strategy for people who want to rent a house with bad credit history is to find a guarantor.
A guarantor is someone who agrees to pay your rent if you are unable to, plus any rent arrears, and cover the cost of any repairs due to damage that you may cause to the property.
By acting as a guarantor, this can reduce their chance of being accepted for future credit themselves, and therefore it is crucial that they understand the risks before they commit to being your guarantor.
It is likely that your guarantor would have to pass a credit check, or at least provide details about their financial situation (such as proof of income, and expenditure).
If you do not know anyone who could act as your guarantor, then you may be able to get support from your local Council, or there are several companies who, for a price, will stand as guarantor for you.
Offer A Bigger Deposit Upfront
Whilst this may be a challenge for most people, offering a bigger deposit upfront can reduce the impact of a bad credit history on your application.
This may put the landlord’s mind at ease if they have any concerns about you being able to pay the rent on time.
Get A Written Reference From A Previous Landlord
Providing a reference is usually a standard element of the application process, but if you can provide a unbeatable endorsement from your current (or previous) landlord that will act as good evidence that you would make a great tenant; by paying your rent on time, and also by looking after the property.
You may be asked what percentage of your deposit you got back from your past landlords, which suggests how well you maintained the property, or whether any expensive repair work was needed after you moved out.
How We Love Renters Can Help You
At We Love Renters, we offer a variety of flexible options when paying your deposit. If you’re on a tight budget, any deposit can be difficult to find, leaving you trapped in your current situation.
We have a few options available to help our tenants…
- We ask all applicants to pay £100 to secure your new home – this forms part of your full deposit.
- If you have a UK based Guarantor we may be able to reduce the deposit required.
- If you can’t get a guarantor, we will ask for a deposit equivalent to 1 months’ rent. If you aren’t able to pay the full amount straight away, don’t worry – we can split any shortfall over the first 3 months of your tenancy.
- You may also be eligible to get help with any deposit from your local council, under a rent deposit scheme or as a discretionary housing payment.
If you’re a renter in Hartlepool looking for a new place to call home, call Stacey on 01429 36 36 36 or visit click the link below:
We think you will love what we can do for you!
To read more of our “Top Tips For Renters” blog articles, click the link below:
To read some of our fantastic renter success stories, click the link below:
Or if you have questions, check out our FAQ Answered page:
- What Is A Guarantor And Who Can Be One For Potential Renters? - April 13, 2023
- Are You Ready For The New Financial Year? – Helpful Financial Tips For Renters - February 23, 2023
- What Are White Goods? – And How You Can Get Them - January 3, 2023