I am about to be credit checked as part of a tenant referencing. I don’t have any CCJs but I do have a default. Will this show up as part of the reference checks? TIA!
I would expect a ‘default’ to show up, as it normally represents an account numerous months in arrears.
That said, there are numerous credit reference agencies, and your default credit supplier might not register on the one used by Openrent referencing.
I’d ultimately recommend being open / honest with your prospective Landlord (ie tell them about it before referencing), as if you don’t tell them about it & they later find out, they may decline you & you may not get your holding deposit back.
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Thanks Karl.
There’s much talk that says that says tenant reference checks can only access Public Records (i.e. Bankruptcies, IVAs, CCJs) and that private account data (e.g. balances, payment histories, defaults) are not part of the check…
Does anyone have anything definitive on that? Have any landlords referenced a tenant and discovered Defaults? (as opposed to public records of CCJs)?
This sample Open Rent report suggests that CCJs are where the focus is without reference to Defaults
Would be good to get a definitive view
Whether your potential new LL considers this an issue will depend on the details of the default. But, for me, no matter what it is, the fact that you haven’t told me this up front would be a red flag. I don’t discriminate against people with CCJs or defaults, but I do discriminate against people who aren’t transparent with me in the application process. In fact, I ask all applicants the question, “If I run a credit check on you, will I find anything?” I explain that finding something I already know about will not disqualify them, but finding something they haven’t told me about will.
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Thanks for your reply. I haven’t had to disclose anything yet, but I will disclose if I put forward an application.
My question is more related to getting a definitive view - do tenant reference checks show only publuic records (bankruptcies, IVAs, CCJs) or do they show private information (defaults, payment histories, etc)?
If you plan to disclose it, I don’t really understand your question. It gives the impression (perhaps unintentionally) that you would not disclose it if it isn’t likely to show up in a credit check. For me, that’s not the right way to approach a LL-T relationship where transparency and honesty both ways are the only ways to build the trust that a good tenancy depends on.
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That’s a lovely answer. Thank you. But it’s not what I asked.
I’d really like to know what information a landlord/reference checking agency uses in determining credit-worthiness. It’s a completely objective question that does not need to be answered by anyone who wants to pass judgement on me!
In response to your (now) completely objective question, in terms of determining credit-worthiness, a LL uses judgement about what a T has not informed them of if they subsequently discover an issue on a credit check.
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Thanks Tatemono - keeping the objective theme running…
Do defaults show up on a tenant reference check?
I had no idea because in 20+ years of letting I’ve never had an applicant with a single issue on a credit check (prob because of the question I ask above), so I searched and immediately came up with this from Experian (who know what they’re talking about):
A default will stay on your credit file for six years from the date of default, regardless of whether you pay off the debt.
Seems definitive to me.
Thanks. I’m completely aware of how defaults are represented on credit reports.
The question here is do they show up on credit checks for tenants?
As a landlord or letting agent, typically you are not in a “reciprocal data sharing” arrangement, which means that, in theory, you don’t see private data. Defaults are private data. Public data will list CCJs, Bankruptcies, IVAs. I would guess that if you’ve had 20+ years of letting without an issue, you’ve only been getting public data.
Does anyone else please have a definitive view whether credit reference checks for tenants reveals private data, ie. defaults?
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@OLB599 I totally understand your question, and its a fair one.
I do not know for sure. My history & more in depth knowledge of credit checks were working for a bank, so they would have access to payment profiles, as they would also have submitted data to them.
Openrent might not have access to the same depth of information, and instead may just receive the public CCJ info etc. I do not know for sure.
That said, they will also likely receive the credit reference agencies ‘credit score’. This is what you can view for yourself by signing up for self credit checkservices such as Experiean, Credit Karma etc. I’d expect this credit score will be affected by any defaults, and poor payment profiles, so indirectly it will affect your Openrent credit reference, as the score will be lower.
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You shouldn’t be discriminating against anyone as a result of the Equality act.
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Mike18… pardon?
He’s saying he will discriminate against someone who has a poor credit file & isn’t open & honest about it.
I’m not sure you will find that is a protected characteristic.
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My point is that it is an inappropriate word in the context of finance and people’s debt history. You might as well use homophobic language on here and complain about it when it is also illegal too.
Furthermore, how would you actually know if someone is lying anyway unless they admit it verbally or in writing?
Colin, are you just making random accusations without proof or evidence because you have an issue with people’s financial problems in general? If so, you’re probably being quite hypocritical as like many of us were all vulnerable towards poverty and the loan sharks.
Discrimination is not a dirty word and is in fact an essential part of what all landlords and other people routinely do.
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I dont quite understand what you’re saying Colin as they’re more full stops in there than there is in a page of a small book. If you know about poverty though you will understand that people can come out of it and this makes the credit checking process a poor indicator of someone’s status. It not an exact indicator of future behaviour as people can improve their credit rating over time. People can receive credit cards with a poor rating so they should be able to rent a home even if other terms need to be considered for that happen. I have rented my flat for over 2 years and never missed a full payment and nearly a year of that I have been in receipt of benefits.
As for benefits theyre plenty of landlords who discriminate against the disabled by refusing them a home based on their income. A full time worker could lose their job part-way through a tenancy agreement. What would their employment status mean then? Would it have mattered that they had a permanent contract? Definitely not! It’s a horrid excuse just to think about your bank balance as a landlord when you are giving someone the chance to be off their streets not on them.
You are all using discrimination in the wrong context. Its quite idiotic as all these messages can be reviewed by Open rent.
Discrimination therefore is a dirty word and leads to penalties for any who are involved in it.
This conversation is getting silly, if we are simply arguing about whether the word ‘discrimination’ was the right word to be used in a context. Lets be sensible & take the chat in the way you think it was intended, rather than being picky about a word choice.
@Mike18 Clearly, landlords will rent their property to the tenant they perceive to be the best risk, and each Landlord will asses this risk in their own way, but likely the source of someones income, and the credit check will form a major part of that consideration.
& the suggestion that Landlords ‘only think of their bank balance’ is stereotyping, and unnecessary. A Landlord is running a business, and some are able to be more flexible financially than others. Being a Landlord doesn’t mean you are made of money and can afford to offer your tenants a charitable lower rent. Some Landlords can do this & do. Some can’t, and must maximise their return for the security of their own income & family. Profit is not a swear word. Profit is business.
You mention about those with poor credit being offered credit cards. Yes they can, but have you compared the APR’s to those credit cards only available to those with perfect credit scores? Would a tenant with bad credit be willing to pay a substantially higher rent because they are a greater risk, as they do with credit cards?
You mention that Landlords discriminate against disabled due to their income. I think you will find that Landlords get many applications from applicants who do not have enough income, whether disabled or not. Affordability is an essential check a Landlord must make. The tenant must be able to afford the rent level on paper, and tenant referencing agencies often assess this on behalf of the landlord against strict criteria. Many Landlords have to select tenants that will ‘pass’ that referencing process, as they need to take rental income protection insurance, to ensure that they can afford their own mortgage & outgoings. If this referencing process rules out someone on low income, a disabled person maybe… this is not discrimination based on their disability, but a risk assessment decision based upon their income level.
Obviously someone who had a bad credit file, can improve their credit standing, and likewise some people have bad credit file due to being unlucky in life, whereas others its due to poor money management. Either way, if a Landlord has a choice of tenants, and some have bad credit & some don’t, then who are they likely to rule out first? You can call it discrimination… I would call it sensible risk management.
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why is this level rudeness ok?
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Mike18, I think you have a limited understanding of the word discrimination. I suggest you refer to a dictionary. As Websters says:
Discrimination has senses with neutral, positive, and negative connotations. On the one hand, it can refer to “the act (or power) of distinguishing” or to "good taste, refinement…
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