Poor credit score would put off almost half of landlords

Poor credit score would put off almost half of landlords

New research has found that 46% of landlords in the UK would refuse an application from a new tenant with a poor credit history.

However credit histories do not currently form part of regular checks for new tenants, despite them giving a better picture of how an applicant has dealt with making payments in the past.

Usually, letting agencies rely heavily on publicly available information like county court judgements or declarations of bankruptcy, which can give some insight into a person’s previous financial footprint, but not the full picture of their current situation.

The fact that landlords would put so much weight behind a credit score suggests the market needs to make this comprehensive check a normal part of the application process.

According to the industry report, commissioned by tenant referencing and insurance agency Landlord Secure, 48% of landlords would refuse to sign a lease agreement with a tenant who had been subject to a county court judgement in the past, while 42% would reject an application from a tenant with past insolvency issue.

Applicants with existing debts like credit cards or loans would raise red flags for 30% of landlords, while those in receipt of housing benefits would struggle to be accepted by 19% of UK landlords and those on universal credit would fail against 16% of landlords.

Although rent payment history does not form part of credit checks, there are increasing calls within the sector for this to become the norm, so those in rental properties can build a credit score based on regular and timely payments and have access to the same advantages as those with a mortgage.


Steve Burrows, managing director at Landlord Secure and LateRent, said: “Those in rental properties are at a serious disadvantage when it comes to building a credit rating because paying rent on time doesn’t count towards this score.

Given that landlords would put more weight behind a tenant’s credit score, those in rental properties should be given the chance to build a better credit score based on their history of paying rent on time.”

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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