Half of landlords would refuse a tenant with a bad credit rating

by Gary Whittaker

Landlords in the UK are increasingly concerned about the finances of those they are letting properties to, it has been revealed, with many saying they would rather not let to a tenant with a bad credit rating. 

Buy-to-let owners rely on regular income from tenants paying rent, and many are worried that tenants with a poor credit rating are far more likely to not pay on time than those with a stronger history. 

As a result, a survey from Landlord Secure shows that 46 per cent say they take credit history into account when they are considering a new tenant, in spite of the fact credit checks are not typically a part of the lettings process. 

Some 48 per cent of those who were surveyed said they would refuse to give a tenancy to someone who had a county court judgement against them in the past, while 42 per cent said they would turn away a potential tenant who had issues with insolvency in the past. 

Other issues that may worry landlords, according to the results of the survey, include credit card and loan debts, while many said they would not want their property to be rented by someone on housing benefits or universal credit. 

At the moment, the strange thing is that rent payment history is not included in credit history reports. However, there are calls from within the industry for this to be the case in the future, with landlords increasingly seeking the ability to be able to see how someone has fared as a tenant in the past. 

Steve Burrows, managing director at Landlord Secure and LateRent, said it would also benefit tenants if rent was to be included in credit scores. 

"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," he said. 

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11-October-17General Lettings News