How to Credit Check a Tenant

Getting a tenant credit check is a key part of the screening process for landlords. Below we look at some of the best ways to credit check tenants. Being a landlord doesn’t come without its risks, and when taking on a new tenant, there is always a good deal of trust involved in the transaction. Statistics published earlier this year stated that in 2012, 59 per cent of landlords found themselves in situations where they had to deal with tenants not paying rent, according to industry data. Further to that, 99,000 tenants this year had not paid their rent in two months; the highest instance since 2008.

Numbers are also rising for the number of evictions that are taking place in the UK, with a rise of eight per cent of landlords beginning eviction proceedings in 2012, compared with the year before.

Situations like these, along with extensive and costly eviction processes further down the line, can sometimes be avoided by picking the right tenant in the first place - but how? The easiest way to do this is to be thorough in your selection process.
 

Picking the right tenant

The first thing you should be doing when searching for a potential tenant is checking their identity and proof of their current address – preferably tax or financial documents – and have an interview in-person, where you can be free to ask questions, such as their reason for moving; this helps to strike up a good relationship from the very beginning. But it doesn’t stop there:

Conducting background checks, requesting personal and employer references and looking at things such as the potential tenants last three months’ bank statements, along with checking with previous landlords is only part of the work. It’s also wise to conduct credit checks on potential tenants before eventually making your decision.
 

Credit checking a tenant

There are a range of services online aimed at providing credit checks for screening tenants, although you will need to register under the Data Protection Act if you haven’t done so previously. Any screening process which is going to give you access to the type of information you really need to know will require you to be registered. Thankfully the process for registration is not complicated.

ConsumerCheck.com is one of the simplest ways to check a tenant. This service offers instant access to over 44 million UK credit files – leaving you with a proven credit score on your potential tenants. The service is pretty straightforward.

Experian also offer a credit screening service, which can be carried out simply by providing a tenant’s name and email address. This service requires the tenant themselves to run the credit search. Once tenants purchase their own credit report the tenant can then grant the third party access to the information.

Other sites such as PIMS.co.uk offer tenant credit checks as part of a membership package They can also provide you with the tenant’s credit score range (400 – 650). The landlord or agent provides the tenant’s full name, current and previous address, postcode and date of birth, and will need to confirm that the tenant has given consent for a credit check to be carried out.
 

Conclusion

Conducting credit checks on tenants is fast becoming standard procedure for most landlords, and is a relatively simple process which can provide you with that much needed piece of mind when entering into a contract with someone you don’t know.

See more credit tips and information.