will i pass letting agency credit check | Discuss

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will i pass letting agency credit check
17/01/2016
4:50 pm
Jay khaine31
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I have bad credit. score of 509. no ccjs and i am not bakrupt. I have to be credit checked by a letting agency before being able to take on a property with my fiancee. The rent is £750 pcm. we will share the rent 50 50. I have given bank statements and I am employed and take home about 700 – 1200 per week. I have provided my current lanlords details and we have kept up to date with rent since moving in 9 months ago. I did have rent arrears on a property before that. have a default on a credit card and that is it. The general internet opinion, from browsing, is that the letting company have limited info and are not extensive intensive searches????

I am really nervous. Do you think i should pass?

17/01/2016
7:03 pm
Tenant Referencing
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Thank you Jay for posting on the Forum, obviously we would normally assess the whole situation on behalf of our members that we provide referencing to.

You mention you defaulted on a credit card, does this mean you missed one payment, have you caught up?

Are you bank statements in the positive or do you reside in an overdraft?

From the figures you have declared of £700 p/w as long as you could provide evidence and your bank statements concurred it would show a good sign of affordability. On a industry calculation of 30x   a rental of £750 per month would mean you and your partner would have to prove you had income of £22,500 or more per year.

You said you had arrears at the property before your current residence, have you paid off those arrears? If not you should consider paying outstanding rental debt so it doesn’t affect your chances moving forward. A rental payment is just like any other bill and if you fall behind you need to catch up.

Hope this helps.

18/01/2016
3:40 pm
David Price
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I regret that as things stand I would not offer you a property because you have unpaid debt.  Your main priority should be to discharge all your debts and get a better credit score and then I would offer you a property.

19/01/2016
2:16 am
PaulBarrett
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As far as I am aware most RGI policies require a good credit score

Bizarrely it makes sense to pay down non rental debt because rent arrears aren’t recorded in credit files

If a tenant doesn’t advise of the previous rental arrears then the new LL can’t find out unless LRS has a record of those rental arrears

It is clearly unfair that rent records are not recorded with CRA

Millions of mortgage payers establish good credit by paying their mortgage payments on time

Millions of tenants have no way of ensuring their good rent payment histories are recorded

Referencing remains an inexact science due to limitations on the availability of certain information

It is I believe a national disgrace that tenants have no CRA approved way of recording rent history

It would be beneficial for so many involved in the PRS if there were such rental records

For those without such rental records it makes it difficult for LL to take them on

Especially for for those tenants without decent credit history

Of course this whole situation is caused by the current onerous eviction requirements

With easier eviction without requiring to attend a court then most LL would accept almost anyone

The current eviction laws whilst protecting existing tenants far too much prevent new tenants from becoming one

LL have to be extremely rigorous with who they take on exactly because of these ridiculous eviction laws

19/01/2016
11:01 am
Landlord001
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Inexact science, Paul B?

This is due to the smokescreen created by insurance companies aka third party reference companies whose business model is to collect premiums en mass from letting agents for deliberate substandard referencing.  If the insurance companies were efficient and rejected a lot of prospective tenants after doing thorough reference checks, letting agents wouldn’t keep using them would they?

Letting agents and their ‘insurance backed’ third party reference companies are mutual appreciation societies that work hand in glove to keep the system of substandard referencing alive.  They don’t make money by rejecting people, do they?

It works like this:

Insurance companies have convinced letting agents that their referencing is much better than it actually is.  Here’s an example.  (See http://letrisks.com/expert-ten…..eferencing)

‘Tenant verification is more than a credit check.  It’s an expert and impartial third party verification of suitability of a tenant to rent property (we make judgements & provide you with the information on which it is based).  You pay for sophisticated searches designed for landlords to give the best possible indication of identity and propensity to default.

LetRisks tenant verification has been developed in conjunction with Experian using the latest technology and analytical techniques to obtain and match data from the most extensive set of records available in the UK.  As part of our normal process we uncover hidden facts about potential tenants that you could otherwise be blind to, however good a judge of chararacter you might be……and it’s not expensive when you consider the complexity of what you get.’

 

When the ‘Tenant Assessment Report’ comes back to the letting agent, the front page of the report carries this disclaimer:

‘The details contained in this report should not be used as the sole reason for making a decision.  LetsRisk cannot be liable for any inaccuracy or incompleteness of any information appearing in this report as it has been provided to LetsRisk by a third party’.

 

In my experience of letting agents, they don’t read the report in full which might include the words ‘refer’ in subsections of it.  A medium risk credit score is explained:

‘The applicant may reside in a postcode area considered to be a higher risk than average, they may not be registered on the voter’s roll or there may be insufficient information upon which to base a decision’.

 

‘insufficient information upon which to base a decision’?

Missing from ‘the data match on the most extensive set of records available in the UK’ was data that was NEVER asked for:

  • The prospective tenant’s date of birth
  • The prospective tenant’s National Insurance Number
  • Visible proof of income, particularly relevant for self-declared earnings

As long as the ‘Overall Decision’ of the report says ‘Accept’, letting agents don’t question anything about the report and simply tell the landlord that the tenants have passed referencing. 

 

To quote my ex-ARLA agent who did just that (for a fee of 50% of the first month’s rent + VAT): 

‘We have to be able to accept their findings and it is not practical to re-check their checks for every application’. 

 

So…. BINGO/BONGO!  That is how easy it is for wrong ‘uns to access the housing market. 

  • There is nothing ‘sophisticated’ about insurance company reference checks so don’t be fooled!
  • Letting agents don’t check the reports no matter how much they collect in fees
  • Got the tenant from hell?  Tough luck.  Insurance company nor letting agent will be interested.

Based on the above, there’s a more than reasonable chance that Jay will get his property.

 

001

19/01/2016
5:54 pm
PaulBarrett
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Yep I have to totally agree with what you gave stated

I was alluding to such by utilising the term 

Inexact science

Being very generous I was

It is just a massive cartel

Which is why I like the LRS offer

I would never trust LA referencing unless they used LRS and I could see all the data based on which I would decide whether they may be a suitable tenant

Obviously the ones that qualify for RGI come first in any tenant queue I might have for a particular property

In a competitive market tenants need to appreciate that if they are RGI qualifiable they will usually be given priority by the LL

I would rather take a tenant who I can achieve RGI on than an alleged millionaire who has no decent records

Tenants should understand that LL desire the tenant with RGI

LL are like mortgage lenders

Not every applicant is successful

Tenants need to seriously consider ensuring they can pass RGI checks or it will simply be no tenancy

With less rental stock LL can afford to be Choosey

But yes overall the usual referencing processes that LL believe are just not fit for purpose

Yet LL willingly hand over keys to tenants who have actually hardly been referenced at all

If it goes wrong there is no comeback on the LA

Their standard retort is sorry nothing to do with is they passed referencing

The big questions then arise

Yes whose referencing!?

What type of referencing?

Which us why the LA referencing service is fundamentally flawed and not fit for purpose

This is the major reason I stopped using LA

The trouble is many LL seem to believe what LA advise them and then pay them for the dubious privilege of being advised

A bonkers business model for the LL

That is why the LRS methodology is so much more efficacious

It tells the tenant story as it is and certainly doesn’t suggest they have passed or failed

It is left for the LL to determine which is how it should be!!

26/02/2017
1:46 pm
Phil_sedge
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David Price said
I regret that as things stand I would not offer you a property because you have unpaid debt.  Your main priority should be to discharge all your debts and get a better credit score and then I would offer you a property.

But how would you know he has unpaid debt?   Credit card defaults wouldn’t show up on a credit check would they?   I thought it was just public information such as CCJs and bankruptcies.   Incidentally I rented a property three years ago with defaults and substantial arrears and they never showed up (and I have paid my rent in full and on time every month for three years.)   

28/02/2017
4:46 am
PaulBarrett
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Phil_sedge said

David Price said
I regret that as things stand I would not offer you a property because you have unpaid debt.  Your main priority should be to discharge all your debts and get a better credit score and then I would offer you a property.

But how would you know he has unpaid debt?   Credit card defaults wouldn’t show up on a credit check would they?   I thought it was just public information such as CCJs and bankruptcies.   Incidentally I rented a property three years ago with defaults and substantial arrears and they never showed up (and I have paid my rent in full and on time every month for three years.)   

When was the last time you looked at your credit files!?

Credit card history is reported monthly by credit card providers to all the CRA.

If you were to be my tenant I would want to see all three recent credit reports

I can suss a credit position out as I understand how such reports work

I doubt you would gave succeeded in obtaining a tenancy with me.

01/03/2017
3:16 pm
David Price
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By chance I looked at my credit report today BUT I do not care what my credit score is as I do not want credit.  In fact apart from my mortgage I have never used credit in my life and never intend to.  I like to keep my money in my pocket not the bank’s pocket.

02/03/2017
1:46 am
PaulBarrett
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Daveid Price said
By chance I looked at my credit report today BUT I do not care what my credit score is as I do not want credit.  In fact apart from my mortgage I have never used credit in my life and never intend to.  I like to keep my money in my pocket not the bank’s pocket.

Oh! Dear Dave looks like you haven’t bought into the consumerist society of wanting everything NOW whether you can afford it or not!!

How quaint!?

I follow your methodology aswell.

However I do use credit as a cashflow management tool.

I pay the debt off in full by the credit card minimum payment date.

02/03/2017
7:41 am
David Price
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PaulBarrett said

I follow your methodology as well.

However I do use credit as a cashflow management tool.

I pay the debt off in full by the credit card minimum payment date.

I use credit cards frequently but I pre fund them, in fact I use them as a current account with a free arranged overdraft facility (the credit limit) which does not have the draconian charges that the banks impose.  I have often wondered why more people do not use their credit cards in this manner?

Like you Paul I pay in full every month, in fact I overpay so that I have a good credit balance for the forthcoming month.  I have never paid a single penny in interest on any credit card.

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