I received a text from one of our let only landlords earlier in the week asking what she needed to get to carry out a credit check on a potential HMO tenant. After requesting the information from the tenant (and of course consent) she received an awkward response;
“From what I know from my previous landlord knowledge, there is no legislation on credit checks for tenancies. With the new GDPR law there are limits on what data can and cannot be collected. Moreover, if I allow you to check my credit it can temporarily lower my score and it will always be on my record that you have checked it.”
If you were in her shoes and keen to get a tenant, would you skip the credit check or would you still insist one is carried out? What other checks, if any, do you do?
I advised our landlord to insist that it was part of her application procedure. What tenant’s don’t realise is that referencing and application procedure starts from the initial call, not just from when they want to move in. How they are on the phone, how responsive they are to calls, how prompt they are for an appointment etc. This all forms part of the overall picture you get for a tenant and affects your verdict to whether or not you would accept them as a tenant. A lot of landlords go on gut feel alone, but what happens when your gut turns out to be wrong?
Last week we had a tenant apply for one of our HMO rooms. Pleasant chap, fairly quiet and father as guarantor, perfect!. He is moving to Newark for work after graduating University so looking for a shared property. As part of our referencing process we carry out a credit check, work reference and previous landlord reference. All standard stuff and on this basis he would have passed with flying colours. But… we also request 3 months bank statements. The tenant was a little hesitant on providing these as he was in the process of moving accounts however we had to insist that this was part of our referencing process. They were provided and instantly we could see why he was a little hesitant. Despite not having an income he was a frequent gambler and depositing as much as £200 a day. Money was coming in from a relative along with benefits but was quickly disappearing. Gambling is fine in moderation. I have the odd flutter if I’m feeling lucky, or unlucky! However, to this excess indicated an addiction and has the potential to cause issues amongst other house mates. Without the bank statements we would have probably passed the tenant. He may have been absolutely fine but we aren’t willing to take that risk.
If a prospective tenant has a pet we’ll even go to their current property to see how it’s being kept. We find this is the best way to judge (see and smell) how they are going to look after your property.
Our referencing process is thorough and designed to keep away those that have something to hide. Our landlords provide great quality properties and it’s our job to ensure we have great quality tenants in them. Don’t cut corners when referencing as a bad tenant can cost a lot more than an empty property.