Whether you’re a letting agent, estate agent or landlord, getting to know your client’s credit score is becoming more and more important. It’s vital you apply the following knowledge to conduct a successful credit check, so you can make an informative decision about whether to take on the tenant or (in some cases) work with the potential buyer. We’ve provided a simple Q and A for your guidance, alongside a useful visual guide published by our contacts at Sainsbury’s Bank.

credit-score-range

What defines your tenant’s credit score?

There are a number of factors that define your tenant’s credit score, mainly being associated with their credit history. A record of late or missed payments or ongoing debt will portray a lower/negative score while a positive finance record will score higher/positive.

How do I calculate a credit score?

As visualised in Sainsbury’s Bank’s guide below, credit scores are calculated between two types of scores. The first area associated with a higher risk to lenders is between 1 and 720, while scores associated with a lower risk are between 721 and 999.

Why do I need to check my tenant’s score?

Checking the financial stability of your tenants will help you make an informed decision about whether to take on the tenants. By being confident that your tenant can pay the tenancy fee, you are significantly less likely to come into an issue of rent arrears or even eviction.

Who should carry out my credit check?

By registering with a Credit Reference Agency, your credit checks can be carried out on each individual tenant. The 3 main UK credit agencies offer services for you as a property professional to sign up with. These are currently listed as:

Experian Tenant Screening

Callcredit Tenant Credit Referencing Checks 

Equifax Resident and Tenant Screening 

Alongside the three main agencies, the NLA (National Landlord Association) can also provide your agency with credit checks.

A visual guide to credit checks provided by Sainsbury’s Bank can be read below:

Credit Scores

Know your client’s credit score