The Importance of a Good Credit Score When Renting

A good credit score is crucial when looking to rent a flat or house. Your potential landlord will run a credit check as part of the tenant referencing process. The reason? Your prospective landlord wants to know how you manage money and if you will pay rent on time. Therefore, your credit history and rental history are good indicators if you will be a responsible tenant or not.

Checking your credit score is a good idea if you are considering renting a place to live. This is because you can take steps to improve your credit rating, but you need to know what it is first. You may also discover mistakes on the credit report that impact your overall rating. A good credit score not only increases your chances of finding a nice place to rent but also affects interest rates on loans and credit cards.

On the other hand, bad credit severely impacts your chances of finding a rental property you can afford.

What kind of credit score should a tenant be aiming for?

There is no single answer to this question. The requirements range based on the location, the demand in the area and the quality of the rental property. You might also find more sympathetic landlords that do not require a strong credit score.

Areas in high demand usually require a minimum credit score of 700, while less demanding areas take tenants with a rating of 600 and over. According to Experian Credit Matcher, the average credit score for apartment renters is around 638, whereas there is no exact minimum for houses.

What is a credit score?

Your credit score is a three-digit number representing the health of your credit history. The score indicates to lenders and landlords how likely you are to meet future financial obligations. The score is based on your track record of making debt payments on time.

How is a credit score measured?

The score on your credit records is based on how you managed bills and debts in the past. Factors affecting your credit score include paying bills on time, bankruptcies, a record of credit cards, loans and mortgages, and details of searches on your credit file.

The acceptable credit score for renting a property

There is no minimum credit score that landlords require when letting properties in the UK. Some private landlords may not even run a credit history check when screening. However, the major credit reference agencies have scores they consider from poor to excellent. Ideally, you should aim for a good credit score.

Here is information from two credit reference agencies in the UK on what constitutes a good score:

• Experian: 881 – 960
• Equifax: 700 – 749

Insufficient credit on a credit report – what does it mean and why it’s a problem?

Insufficient credit on a credit report usually means that you probably don’t have enough credit accounts, or you haven’t used credit for a long time or at all, which means that your credit history is not enough to evaluate your credit score. This makes it a problem because your trustworthiness with regular payments cannot be calculated even if you are in an excellent financial position. This potentially indicates that you could be a financial risk to landlords.

Options for renting an apartment when you have bad or no credit:

A bad credit score doesn’t always mean that you can’t rent a place to live. There are some other trustworthy practices that can that landlords might consider when renting a flat for you. Here are a few options you can try:

• Pay several months of rent in advance
• Arrange to pay a larger deposit
• Use a guarantor who will pay your rent if you cannot
• Show proof of employment along with your record of earnings or bank statements
• Get references from previous landlords

Don’t try to hide issues with your credit report. Honesty is the best policy, and you can give the landlord proof of what happened to show that missed payments and poor scores are a thing of the past.

How to check your credit score?

You can request your credit file from a credit reference agency through a third-party service like CheckMyFile. There, you can see your credit report from four major credit bureaus. This can give you the info you need before you submit a rental application. You can also use the report to take steps and improve your bad credit score if you have a poor credit history.

Looking to rent a flat or home in Willesden Green?

If you’re considering moving to Willesden Green, do not hesitate to contact our expert team today. We have over 25 years of experience helping renters find the perfect home in the area. Browse our available properties to rent or give us a call at 020 8459 2530 today.