How to perform a rental credit check as a landlord

Conducting a thorough tenant background check can help landlords find reliable and trustworthy tenants for their properties and avoid potential financial losses.


3 minute read
Updated on 6 Feb 2024

As a landlord, it's essential to ensure that you have a reliable and trustworthy tenant who will pay their rent on time and take care of your property. One way to assess a tenant's potential risk is to run a credit check. A rental credit check provides valuable insight into a tenant's financial history, which can help you decide whether to accept them as a tenant or not.

In this article, we'll guide you through the steps to run a credit check on a prospective tenant in the UK.

1. Obtain the tenant's consent

Before you can run a credit check on a tenant, you must obtain their consent.

You should provide the tenant with a written statement explaining that you intend to carry out a rental credit check and why. Inform them that the check will be conducted by a credit reference agency. Make sure the tenant signs the statement to confirm that they have given their consent.

2. Choose a credit reference agency

There’re 3 major credit reference agencies in the UK: Experian, Equifax, and TransUnion. But you can also opt for the government-approved one-stop shop for tenant referencing – RentProfile. They will offer a credit report for you to evaluate your prospective tenant.

What do landlords see on credit check in the UK?

Credit reference agencies can only conduct a soft search for landlords in the UK. This means they can only access public information, such as if the potential tenant has been bankrupt or owes money as determined by a court. But, credit checks won't reveal if tenants have missed rent payments in the past, credit agreements, credit limits, or repayments.

In summary, landlords can only see:

  1. Electoral roll status to confirm the tenant's name and address.
  2. Insolvencies or County Court judgments (CCJs), indicating formal court rulings that the tenant owes money.
  3. Fraud convictions

3. Request a credit report

Once you have chosen a credit reference agency, you can request a credit report on the prospective tenant. The report includes information about a tenant's previous addresses and financial history, including credit score, credit accounts, and payment history. You will also discover whether the candidate has any past criminal convictions.

You must provide the tenant's full name, date of birth, and address history to the agency. It’s recommended to provide 2–3 previous addresses of the tenant for the most accuracy. Some agencies require the tenant to run the credit check themselves.

4. Review the credit report

When you receive the credit report, take the time to review it carefully. Look for any red flags indicating that the tenant is a high-risk applicant.

For example, a history of missed payments, defaults, or CCJs (County Court Judgments) may suggest that the tenant isn't reliable.

5. Use the information to make an informed decision

After reviewing the credit report, use the information to decide whether to accept the tenant. Remember that a credit check is just one aspect of the tenant background check. You should also consider other factors such as their right to rent, employment status, rental history, and references.

Suppose you decide not to accept the tenant based on the credit report. In that case, you must inform them of the decision and provide details of the credit reference agency you used. The tenant has the right to obtain a copy of the credit report and dispute any inaccuracies.

Running a tenant credit check is subject to data protection laws. You must ensure that you comply with the relevant legislation, including the General Data Protection Regulation (GDPR) and the Data Protection Act 2018.

How much does running a credit check in the UK cost?

The cost of credit reference checks can vary depending on the credit reference agency you choose and the level of detail you require.

Credit reference agencies like Equifax and Experian work on a monthly subscription basis with prices of £10.95 and £14.99 per month respectively.

From £12 you can get credit reference check by TransUnion through NRLA if you're a member of their association. They offer discounts if you are conducting checks on multiple addresses at once. So you can conduct a check for 2 addresses for only £13 and 3 addresses for £14.

Credit reference agencyPrice
Equifax£10.95 per month
Experian£14.99 per month
TransUnion via NRLA)£12 per tenant
RentProfile£13 per tenant

Additionally, you can choose to pass on the cost of credit reference checks to the tenant by charging an application fee. On HousingAnywhere you can do that by making a one-time payment request from your payment overview.

Running a credit reference check is a relatively small cost compared to the potential risks of renting to a tenant who isn’t financially responsible or trustworthy.

Should you credit check a guarantor?

Absolutely. You should perform a credit check on a guarantor before accepting them as a guarantor for a tenant. The guarantor agrees to pay the rent or cover any damages if the tenant cannot. Therefore, their financial stability and ability to fulfil this obligation are crucial..

Running a credit check is an essential part of the tenant screening process. It helps you make an informed decision about accepting a tenant and mitigating the risks of rent arrears. Remember to obtain the tenant's consent, choose a reputable credit reference agency, review the credit report carefully, and use the findings to make an informed decision. By following these steps, you can ensure that you find a reliable and trustworthy tenant for your property.

This article is for informational purposes only. Please consult the appropriate authorities for the latest developments or a lawyer for legal advice.

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