Online lettings platform Mashroom says there are four tips for tenants who want to boost their credit ratings to have a better chance of passing referencing tests.
1. Include rent payments on your credit report - Services like Credit Ladder allow you to add rent payments to your credit score via Experian and Equifax. “These are a great way to boost your score if you’re a reliable payer” claims Mashroom.
2. Prepare - Get all of your documents in order, such as bank statements, proof of address, income, and employment. Check your credit report regularly, and report anything which is inaccurate.
3. Be honest - If you think you might not pass referencing, tell the landlord beforehand. Tenant referencing and credit checks aren’t the same as when you take out credit or a loan. The decision doesn’t lie with a computer. The landlord has the final say.
4. Ask a Guarantor - If asked to provide a guarantor, there are various requirements that need meeting. In some cases, the guarantor will need to earn more than 2.5 times the annual rent. It can be as much as 3.5 times though it’s the landlord who decides.
Mashroom chief executive Naveen Jaspal tells tenants who has not passed referencing: “You need to work out why you have failed, is it because you were a bad tenant in a previous property? If so, then you will have more work to do in building up the trust of a new landlord.
“Most of the time, getting a guarantor would allow you to pass your referencing, so ask a family member or a friend to be your guarantor. Guarantors usually need to already own a property as collateral. If you don’t have anyone to ask, guarantor companies exist, who agree to be your guarantor for a fee.
“Often talking to your prospective landlord about the reasons behind your failing the referencing process, and explaining the reasons - for example, you were made redundant during covid and fell into arrears, helps the landlord understand that you are not a risk."
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