I am moving out of my current flat in September, and will be moving in with a friend. I’m concerned about passing credit checks. Three years ago, a part-time job that I was expecting to convert into a full-time job fell through and subsequently realised I would struggle to make some of my debt payments. I reached out to a debt charity immediately who helped me onto a DMP. This means that my credit score is now very low (513 on transunion). However, I’ve never missed a rent payment in my seven-year renting history and have also not missed a DMP payment. I’m employed full time on a permanent contract (and have been for the last two years). I also don’t have any CCJs, IVAs or history of bankruptcy. Hoping for insights on how this might impact my friend and I’s rental applications? And if there is anything I (we) can do to improve our chances? For context, my friend could pass the affordability check for the budget we have set ourselves on hher salary alone but we’ll obviously be splitting it.
Do you have a guarantor who is a homeowner and either in receipt of a pension or wage?
Hi, @tatemono. Yes, I do have a guarantor.
That will def help.
You won’t be “splitting it” if you’re both on the tenancy agreement. You’ll be “joint and severally liable”. That means that either of you is liable for the entire rent. This has implications because it means that if one of you stops paying, the LL can pursue rent from the other, and with you not being able to pass affordability, that’s a risk.
As she can afford it, have you considered the tenancy agreement just being in her name and you being a “permitted occupier” i.e. an adult who is allowed to live there but bears no financial responsibility. Obviously, you can pay your friend the 50% of the rent you owe, but you wouldn’t have to pay the LL and the LL wouldn’t have to run checks on you other than right to rent.
If you get yourself an account on clearscore, as well as getting a score it also gives advice on things to improve your credit. Includes simple stuff like signing up to electoral register
Good luck
Clearscore.com is an excellent resource and is/was free to check your Experian score. Also Moneysavingexpert credit club.
Your credit score is not affected by checking your score, its a soft search, and has no impact.
Check all 3 CRA’s if you can to see what score you have with each. A credit card used judisciously can help boost a score over time. If anything is inaccurate, get it corrected.
Be completely up front with Lettings agent or LL whichever you use, provide documentation about how it happened if necessary showing how you are managing your DMP over 3 years.
Thanks for your response. If I may ask a follow-up question: what are the implications for me if I follow the permitted occupier route and looking for a new rental in 2 - 3 years’ time? How would I be able to demonstrate that I’ve always paid my rent on time?
If you are a permitted occupier but pay rent, it will be to the other occupier, the tenant. They will then be your landlord. They would have legal duties that they may not be aware of and have to declare the income to HMRC and pay tax on it. The owners lease or mortgage may also forbid such underletting. There would be no official record of your rent payments and future referencing would flag this as a gap in your history and may fail you.
I didn’t realise the implications that David has pointed out so that is likely not to be a route for you.
And yes, you’re right that it’ll give you a void in your renting history.
Forget that then! 