How To Rent With a Bad Credit Rating

  Mar 20, 2020       No Comments   

Having a bad credit score can potentially affect a number of things, such as applying for a loan, credit card, getting a mortgage and renting a home. The majority of landlords will run a credit check on you to take a look at your credit history to see if you’re a potential financial risk. Renting with a bad credit rating isn’t impossible. You may have to jump through a few hoops before you can secure your dream home. We’ll outline a number of different ways to rent with a bad credit rating below.

What is a credit report?

To put it simply, a credit report, or your credit score is an indicator of your financial behaviour and how you manage your finances. It’s taken from the last six years of your credit history. It will include a summary on your finances and will include loans, credit cards, mortgages and even your utility bills.

How can I get a credit report?

There are a number of different ways you can check your credit rating online. Popular sites include:

• Equifax
• Experian
• TransUnion

Top Tip: checking your credit rating with all three credit reference agencies is a good idea. They all hold information on you which lenders use.

Does checking your credit score affect your credit rating?

No. Checking your credit score will not impact your credit rating. Checking your credit score is classed as a “soft inquiry” and is not visible to potential lenders and letting agencies. Regularly checking your credit rating is a great way to keep on top of your financial health.

How to rent with bad credit 

You’ve found your dream home, however, you have a credit history that is less than perfect. Here are our five ways you can improve your chances of securing that rental you’re dreaming of:

Find a guarantor

A landlord or letting agent may be a little bit hesitant allowing you to become a tenant with a bad credit rating, however, having a guarantor can easily alleviate any concerns the landlord or agency may have. Even though you’ll be the person living in the property, having a trusted family member or friend to act as a guarantor means that they’ll cover the cost of rent if for some reason you can’t. 

Top Tip: Obviously, you don’t want your guarantor making payments for you, so make sure the rent is something you can afford.

Be honest and upfront

If you know you have a bad credit rating, it may be beneficial to let your letting agency know. Being honest and upfront about your credit score may score a few points. Having a bad credit score isn’t necessarily a sign of poor financial management. You may have suffered a financial setback, such as losing your job, that was out of your control.

Pay in advance

The main reason why landlords and letting agents are cautious when it comes to bad credit is that it might suggest you’ll not be able to keep up with payments. Paying your rent a few months in advance may also be another way to score a few points. This will demonstrate your commitment to the rental agreement, as well as cover rent if you miss it – which you won’t obviously!

Show your references

It’s not uncommon for employers to ask for references when you’re applying for a job right? The same can apply when renting a property. Landlords and letting agents will want to know what you’re like as a tenant. If you have previously rented property in the past, we recommend putting together a list of references to show that you’re the ideal tenant.

Have a solid and consistent income

Even if your credit history is a little concerning, having a steady income can help to alleviate any concerns a potential landlord of agency you may have about you. Are you in a steady job and have been for a while? Having proof of income, recent payslips and a letter from your employer confirming your salary and employment status can go a long way. 

Have you recently started a new job? If so, make sure you have a letter from your employer confirming your income and employment status and provide any other documents, such as bank statements etc. if necessary.

Thinking about renting?

Here at Prem-Lets, we have a fresh and enthusiastic approach to property lettings that is built on solid foundations and professionalism, ensuring people want to and continue to deal with us. With over four decades in the business, we are no strangers to the professional letting and student lettings market.  Please feel free to reach out to us If you’re interested in renting a property.