With most rental properties requiring credit checks, how do you prove you’d be a reliable tenant if you have bad credit or no credit history?
It’s difficult to rent a property if you have bad credit and no guarantor. If you’ve moved from abroad, you’ve not taken out credit recently, or you’ve just turned eighteen, it can be hard to show landlords that you’d make a responsible tenant who’d pay on time every month.
The best place to start is working on improving your credit score.
What is a guarantor?
A guarantor is someone who agrees to sign a legal document confirming that they’ll cover the rent (and in some cases damages to the property) if the tenant stops paying (for whatever reason). A trusted friend or family member could be a guarantor, but they’d need to have a good credit history themselves.
Finding a guarantor
If you don’t have a guarantor, there are some companies that will act as a guarantor for you.
Housing Hand is one example - they'll act as a guarantor for tenants at a cost. There’s no credit check involved, but you’ll need someone else to sign up with you to share responsibility. You’ll also have to pay a fee for this service. The fee depends on the cost of your rent, but its at least £42 per month for 8 months. This service also isn’t available for those who are unemployed or earn less than 1.5x their rent.
There are other companies that do this, but they all will involve fees, especially an initial one that can be quite hefty, so you should always check this first.
Ask your university for help
Some universities offer guarantor schemes for students that have a good academic record and can prove they have the income to cover rent. If you’re currently at university and looking to rent privately, ask if your university offers this.
If your university doesn’t have a guarantor scheme, they may have a partnership with one of the guarantor companies. For example, Bristol University students can sign up for the Housing Hand scheme at a reduced price.
Prove any rent history
If you’ve been a good tenant previously, then tell your prospective landlord and ask your previous landlord if they’d be willing to give you a good reference, to confirm that you paid your rent on time each month.
If you’re currently renting, you could consider joining the Rental Exchange Initiative. It’s a scheme that helps you to report your rental payments to the credit reference agency Experian. If you always pay your rent on time, every time, this can help you to build up a good credit history, showing lenders that you’re responsible with money. Of course, it works the other way too, and if you pay late or miss a payment it can harm your credit score and your ability to get credit in the future.
Pay rent in advance
Another way you could improve your chances of getting your rental application accepted, is to offer to pay several months’ worth of rent in advance. Only do this if you’ve got the cash spare, and make sure you leave yourself with enough money to live on.
Paying for three, six, or 12 months upfront might be a way to get your foot in the door. If you do this, make sure it’s stated in the contract, so you know if you can expect a refund if the tenancy is terminated early for whatever reason.
Put down a larger deposit
If you haven’t got enough to cover several month’s rent straight away, then you could offer a larger security deposit. The tenancy laws in England cap the deposit at five weeks’ worth of rent. However, Scotland cap the deposit at two months, while Ireland and Wales have no cap. If the advert is only asking for one month deposit, try offering two months to give the landlord some extra security. Ensure any deposit you pay is held securely - find out about the deposit protection schemes.
If you’re facing homelessness
Your local council may be able to help by acting as a guarantor for you or by providing help with paying the security deposit or rent in advance. If they can’t help, they could put you in touch with charities that can. If you think you could benefit from one of these schemes get in touch with your local council’s homeless team.
If you can wait to rent
If you’re not in as much of a rush to find somewhere to rent, it’s worth looking to improve your credit score to give you the best possible chances of getting somewhere.
- make sure you’re on the electoral register
- look into credit builder products
- check you’re not financially associated with anyone who has bad credit
- make any fixed payments on time, every time.
For 21 ways to improve your credit score this year, read on here.
Disclaimer: All information and links are correct at the time of publishing.BACK TO BLOG HOME