Landlord query re credit checks and affordability
Discussion
Hi All
Not sure if I am in the right forum. I am a landlord and recently had two separate credit checks done on a young couple who wish to rent my property.
Both have declared balances on credit cards and one has a loan on car.
I have few concerns as
1. Neither met the affordability criteria to pay the rent alone but jointly they can, based on info provided
2. One however has 9 current lenders on their equifax report but only two lenders are declared on the credit check reference form (but it appears that on the online form only two credit companies can be listed on the form any way!)
I am thinking of asking the prospective tenant to explain why he has 9 current lenders and what is owing. What would it be reasonable to request to see. (I am not happy with the credit reference checking company)
Any other tips on how best to assess debt and risk
Many thanks in advance for any tips
24/7
Not sure if I am in the right forum. I am a landlord and recently had two separate credit checks done on a young couple who wish to rent my property.
Both have declared balances on credit cards and one has a loan on car.
I have few concerns as
1. Neither met the affordability criteria to pay the rent alone but jointly they can, based on info provided
2. One however has 9 current lenders on their equifax report but only two lenders are declared on the credit check reference form (but it appears that on the online form only two credit companies can be listed on the form any way!)
I am thinking of asking the prospective tenant to explain why he has 9 current lenders and what is owing. What would it be reasonable to request to see. (I am not happy with the credit reference checking company)
Any other tips on how best to assess debt and risk
Many thanks in advance for any tips
24/7
Twentyfour7 said:
Hi All
Not sure if I am in the right forum. I am a landlord and recently had two separate credit checks done on a young couple who wish to rent my property.
Both have declared balances on credit cards and one has a loan on car.
I have few concerns as
1. Neither met the affordability criteria to pay the rent alone but jointly they can, based on info provided
2. One however has 9 current lenders on their equifax report but only two lenders are declared on the credit check reference form (but it appears that on the online form only two credit companies can be listed on the form any way!)
I am thinking of asking the prospective tenant to explain why he has 9 current lenders and what is owing. What would it be reasonable to request to see. (I am not happy with the credit reference checking company)
Any other tips on how best to assess debt and risk
Many thanks in advance for any tips
24/7
use a decent letting agent. Not sure if I am in the right forum. I am a landlord and recently had two separate credit checks done on a young couple who wish to rent my property.
Both have declared balances on credit cards and one has a loan on car.
I have few concerns as
1. Neither met the affordability criteria to pay the rent alone but jointly they can, based on info provided
2. One however has 9 current lenders on their equifax report but only two lenders are declared on the credit check reference form (but it appears that on the online form only two credit companies can be listed on the form any way!)
I am thinking of asking the prospective tenant to explain why he has 9 current lenders and what is owing. What would it be reasonable to request to see. (I am not happy with the credit reference checking company)
Any other tips on how best to assess debt and risk
Many thanks in advance for any tips
24/7
As a decent letting agent
we don't use external referencing companies except for CCJ/bankruptcy checks except if a rent warranty is required but we still double check the references ourselves.We do the actual referencing and go one step beyond what most other agents do - we actually investigate their references/income.
We use our considerable experience of filtering out tenants so that our landlords are successful.
So part of the process we do is to match up all income on a 6 mths bank statements to all declared income to show its verified. where is the income from?
We work on a 2.5x rent to the income. ie £1000pcm rent = £2500 income they have the be earning to afford to live there. Joint is fine but more risky if neither on their own can do it.
Are they in credit each month on their bank accounts? do they have savings?
we then check all expenditure to see if they match up to normal type expenditure or if there unusual type expenditure and if there are loans/repayments etc. is there any Universal credit/HB payments?
We write formally to previous landlords for a reference but we also "off the record" speak to them to get the real info if we can. We do social media searches on the tenants . We talk with the tenants and use our experience to really see if we think they are being truthful or not.
what sort of work do they do? is it stable? how long worked there? etc
So is their income for their wages 2.5x the rent ? if not don't let to them.
how long have they been together? any track record? you don't want them splitting after 2 months if just met and is their first home together.
Can you get a guarantor who is earning 3x the rent and is a home owner?
9 lenders? you mean 1 tenant has 9 loans? seriously he has 9 loans?
Edited by superlightr on Wednesday 22 May 10:12
Edited by superlightr on Wednesday 22 May 10:13
Joint salary declared covers annual rent (I have not seen references sent to credit check agency, but told salary confirmed.) Said in regular full time jobs for several years
Been together about a year I think
I'll ask for guarantor to cover them both but understand parents may not wish to do this but they may still be good tenants
Going to follow your suggestion and ask for 6/12 bank statements from both but what if they have other bank accounts they dont declare ?
Will ask about lenders as although he said no loans I think the lenders may be credit cards, phone accounts, cant think what else?
Don't know whether to ask him to request an Equifax report showing lenders etc and share with me?
Been together about a year I think
I'll ask for guarantor to cover them both but understand parents may not wish to do this but they may still be good tenants
Going to follow your suggestion and ask for 6/12 bank statements from both but what if they have other bank accounts they dont declare ?
Will ask about lenders as although he said no loans I think the lenders may be credit cards, phone accounts, cant think what else?
Don't know whether to ask him to request an Equifax report showing lenders etc and share with me?
superlightr said:
use a decent letting agent.
As a decent letting agent we don't use external referencing companies except for CCJ/bankruptcy checks except if a rent warranty is required but we still double check the references ourselves.
We do the actual referencing and go one step beyond what most other agents do - we actually investigate their references/income.
We use our considerable experience of filtering out tenants so that our landlords are successful.
So part of the process we do is to match up all income on a 6 mths bank statements to all declared income to show its verified. where is the income from?
We work on a 2.5x rent to the income. ie £1000pcm rent = £2500 income they have the be earning to afford to live there. Joint is fine but more risky if neither on their own can do it.
Are they in credit each month on their bank accounts? do they have savings?
we then check all expenditure to see if they match up to normal type expenditure or if there unusual type expenditure and if there are loans/repayments etc. is there any Universal credit/HB payments?
We write formally to previous landlords for a reference but we also "off the record" speak to them to get the real info if we can. We do social media searches on the tenants . We talk with the tenants and use our experience to really see if we think they are being truthful or not.
what sort of work do they do? is it stable? how long worked there? etc
So is their income for their wages 2.5x the rent ? if not don't let to them.
how long have they been together? any track record? you don't want them splitting after 2 months if just met and is their first home together.
Can you get a guarantor who is earning 3x the rent and is a home owner?
9 lenders? you mean 1 tenant has 9 loans? seriously he has 9 loans?
I wouldn't provide six months of bank statements to a letting agent in a million years, or tell them how long my partner and I had been together, or provide a guarantor, despite the fact I have no financial problems whatsoever. Very prying. That's a quick way to put off decent tenants who have a choice as to where they live. As a decent letting agent
we don't use external referencing companies except for CCJ/bankruptcy checks except if a rent warranty is required but we still double check the references ourselves.We do the actual referencing and go one step beyond what most other agents do - we actually investigate their references/income.
We use our considerable experience of filtering out tenants so that our landlords are successful.
So part of the process we do is to match up all income on a 6 mths bank statements to all declared income to show its verified. where is the income from?
We work on a 2.5x rent to the income. ie £1000pcm rent = £2500 income they have the be earning to afford to live there. Joint is fine but more risky if neither on their own can do it.
Are they in credit each month on their bank accounts? do they have savings?
we then check all expenditure to see if they match up to normal type expenditure or if there unusual type expenditure and if there are loans/repayments etc. is there any Universal credit/HB payments?
We write formally to previous landlords for a reference but we also "off the record" speak to them to get the real info if we can. We do social media searches on the tenants . We talk with the tenants and use our experience to really see if we think they are being truthful or not.
what sort of work do they do? is it stable? how long worked there? etc
So is their income for their wages 2.5x the rent ? if not don't let to them.
how long have they been together? any track record? you don't want them splitting after 2 months if just met and is their first home together.
Can you get a guarantor who is earning 3x the rent and is a home owner?
9 lenders? you mean 1 tenant has 9 loans? seriously he has 9 loans?
Edited by superlightr on Wednesday 22 May 10:12
Edited by superlightr on Wednesday 22 May 10:13
Twentyfour7 said:
Joint salary declared covers annual rent (I have not seen references sent to credit check agency, but told salary confirmed.) Said in regular full time jobs for several years
Been together about a year I think
I'll ask for guarantor to cover them both but understand parents may not wish to do this but they may still be good tenants
Going to follow your suggestion and ask for 6/12 bank statements from both but what if they have other bank accounts they dont declare ?
Will ask about lenders as although he said no loans I think the lenders may be credit cards, phone accounts, cant think what else?
Don't know whether to ask him to request an Equifax report showing lenders etc and share with me?
Do you only want to let to people too desperate to tell you to pBeen together about a year I think
I'll ask for guarantor to cover them both but understand parents may not wish to do this but they may still be good tenants
Going to follow your suggestion and ask for 6/12 bank statements from both but what if they have other bank accounts they dont declare ?
Will ask about lenders as although he said no loans I think the lenders may be credit cards, phone accounts, cant think what else?
Don't know whether to ask him to request an Equifax report showing lenders etc and share with me?
s off? Integroo said:
superlightr said:
use a decent letting agent.
As a decent letting agent we don't use external referencing companies except for CCJ/bankruptcy checks except if a rent warranty is required but we still double check the references ourselves.
We do the actual referencing and go one step beyond what most other agents do - we actually investigate their references/income.
We use our considerable experience of filtering out tenants so that our landlords are successful.
So part of the process we do is to match up all income on a 6 mths bank statements to all declared income to show its verified. where is the income from?
We work on a 2.5x rent to the income. ie £1000pcm rent = £2500 income they have the be earning to afford to live there. Joint is fine but more risky if neither on their own can do it.
Are they in credit each month on their bank accounts? do they have savings?
we then check all expenditure to see if they match up to normal type expenditure or if there unusual type expenditure and if there are loans/repayments etc. is there any Universal credit/HB payments?
We write formally to previous landlords for a reference but we also "off the record" speak to them to get the real info if we can. We do social media searches on the tenants . We talk with the tenants and use our experience to really see if we think they are being truthful or not.
what sort of work do they do? is it stable? how long worked there? etc
So is their income for their wages 2.5x the rent ? if not don't let to them.
how long have they been together? any track record? you don't want them splitting after 2 months if just met and is their first home together.
Can you get a guarantor who is earning 3x the rent and is a home owner?
9 lenders? you mean 1 tenant has 9 loans? seriously he has 9 loans?
I wouldn't provide six months of bank statements to a letting agent in a million years, or tell them how long my partner and I had been together, or provide a guarantor, despite the fact I have no financial problems whatsoever. Very prying. That's a quick way to put off decent tenants who have a choice as to where they live. As a decent letting agent
we don't use external referencing companies except for CCJ/bankruptcy checks except if a rent warranty is required but we still double check the references ourselves.We do the actual referencing and go one step beyond what most other agents do - we actually investigate their references/income.
We use our considerable experience of filtering out tenants so that our landlords are successful.
So part of the process we do is to match up all income on a 6 mths bank statements to all declared income to show its verified. where is the income from?
We work on a 2.5x rent to the income. ie £1000pcm rent = £2500 income they have the be earning to afford to live there. Joint is fine but more risky if neither on their own can do it.
Are they in credit each month on their bank accounts? do they have savings?
we then check all expenditure to see if they match up to normal type expenditure or if there unusual type expenditure and if there are loans/repayments etc. is there any Universal credit/HB payments?
We write formally to previous landlords for a reference but we also "off the record" speak to them to get the real info if we can. We do social media searches on the tenants . We talk with the tenants and use our experience to really see if we think they are being truthful or not.
what sort of work do they do? is it stable? how long worked there? etc
So is their income for their wages 2.5x the rent ? if not don't let to them.
how long have they been together? any track record? you don't want them splitting after 2 months if just met and is their first home together.
Can you get a guarantor who is earning 3x the rent and is a home owner?
9 lenders? you mean 1 tenant has 9 loans? seriously he has 9 loans?
Edited by superlightr on Wednesday 22 May 10:12
Edited by superlightr on Wednesday 22 May 10:13
Twentyfour7 said:
Joint salary declared covers annual rent (I have not seen references sent to credit check agency, but told salary confirmed.) Said in regular full time jobs for several years
Been together about a year I think
I'll ask for guarantor to cover them both but understand parents may not wish to do this but they may still be good tenants
Going to follow your suggestion and ask for 6/12 bank statements from both but what if they have other bank accounts they dont declare ?
Will ask about lenders as although he said no loans I think the lenders may be credit cards, phone accounts, cant think what else?
Don't know whether to ask him to request an Equifax report showing lenders etc and share with me?
Do you only want to let to people too desperate to tell you to pBeen together about a year I think
I'll ask for guarantor to cover them both but understand parents may not wish to do this but they may still be good tenants
Going to follow your suggestion and ask for 6/12 bank statements from both but what if they have other bank accounts they dont declare ?
Will ask about lenders as although he said no loans I think the lenders may be credit cards, phone accounts, cant think what else?
Don't know whether to ask him to request an Equifax report showing lenders etc and share with me?
s off? We try to be diplomatic about it but if a tenant doesn't want to show actual proof of income ie bank statements then we wont go any further with them. Why would you have an issue with showing proof of your income? If your income is good then we would not ask for a gtor. We would ask if you and partner had rented before to try an ascertain the risk level if you may split as its a higher risk for 1st time move in together tenants. if both have good incomes and can afford it individually then its not an issue but may be if 2.5x is joint only.
I don't think it too intrusive to ask for actual proof that they can really afford to rent a property. We let 300 odd properties each year and have very few defaults or issues with tenants once they pass the references we do, did I say very few defaults?
Other agents are not so cautious and have more issues with defaulting tenants. The landlords then come over to us and we then do the job properly.
so yes we want to see the 2.5x income entering into the bank accounts - the tenants need to show whatever bank accounts show this 2.5x regular income. They don't have to show all saving accounts if they don't wish to but we wont take those into account for the calculations.
you then have all the cross checking of addresses and Id's etc.
We have a range of tenants and properties from £650pcm to £3500 pcm they all have to show bank accounts and be in stable employment. If self employed or Director then we do other checks equally as cautious. Number of times we have found adverse info out which would not be apparent on an instant credit/reference check.
There are so many things to take into account and experience of doing this counts for a lot as well.
Edited by superlightr on Wednesday 22 May 16:06
Edited by superlightr on Wednesday 22 May 16:08
bristolracer said:
What ever happened to "here's your rent book, £6 per week, ill be round on Friday to collect.Gas is 2 bob in the meter. Don't muck me about or you'll be out"
hahahaha!!Referencing - pretty much all of it - is more or less a waste of time. And the very best it gets to is giving you some idea about the past.
Funnily enough I looked at my own Experian credit reference the other day. Apparently I live in the dwelling I lived in before the one I moved from last year to the one I'm currently in. And apparently my previous residence was my old office premises.
I also appear to be making monthly payments to 3 x loans with £0 balances which actually expired almost 10 years ago.
I bought the missus car from her last year via a loan from Oracle of which there appears to be no record. Nor is there any record of the interest free credit I took advantage of to buy some furniture. And apparently I don't have a credit card at all!!
It completely baffles me why anyone, never mind banks and finance houses, takes these nonsense credit references seriously.
Previous landlord references are often more entertaining than informative.
Dreadful people bearing great references from landlords trying to get rid of them. And decent people bearing what amount to 'revenge missives' from past landlords who make clear that they would benefit from some sessions with a psychologist. Young people who've never had a property before, foreigners just arrived, etc etc etc.
The biggest uncertainty when taking on a new tenant is what is going to happen NEXT, not what it has been like up to now.
Will they lose their job? How can you tell? Will the firm they work for go bust? Who knows? Will they take ill? Try predicting that.
But if you discover that financial defaulting is most common via people either being made redundant or becoming too ill to work then what you surely need to do is some research into their employer's stability and likely future prospects and perhaps some research into the tenant's medical history as well. One of these can be very hard to do and the other impossible!
Actually, the number of people who deliberately enter into a financial agreement which they know they won't be able to fulfil and which when they default will cause them no end of problems is really pretty small.
As to their relationships, well how do you predict how those are going to pan out? Do you make the silly assumption that people who've only been together a couple of months are more likely to split up than people who've been together for years? Or that people with kids are less likely to separate than people without them? Really? Good luck with that then. Like work, relationships end as quickly as they form and for a myriad of unpredictable reasons.
What about the conduct of their tenancy? How do you know they're clean? Or tidy? Or don't live carelessly? Or won't have enormous wild parties? Or friends who abuse the property even if they don't? Or just happen to like to stay up all night playing bongo drums and heavy metal music at volume 20 ? Or have a side-gig in pimping or dealing or terrorism or sub-letting to multiple occupants? or....well the list of human monkey-business and misbehaviour is bloody endless, isn't it?
Then it's who you exclude.
Of course if you took this to extremes and started making all kinds of intrusive checks including CR and Advanced Disclosure checks you'd end up with no-one whatsoever fit to rent your property. And I do sometimes wonder just how many perfectly good, nay, first class tenants get turned away because they don't manage to tick the potentially endless list of boxes authorities of all types (not just letting agents) dream up to convince themselves they're doing a proper job.
Edited by selmahoose on Wednesday 22 May 17:07
superlightr said:
Twentyfour7 said:
Thank you very much Superlightr, yes equifax report says 9 current lenders
doenst sound like your guy is very good with his money if he needs 9 loans..... whats his income/bank statements like? pretty rubbish I bet.what about the other questions?
The Moose said:
Bear in mind that you could have a few credit cards for points and not actually carry a balance, a few bank accounts with an over draft facility (I always have over draft facilities even though I never use them in case I mess up), a couple of phones and a car loan to add up to many different lenders but not being in particularly bad financial shape.
My mate owns about 1000 vehicles. All private hire taxis rented to some of his 3000 drivers. All bought with finance. That's 1000 loans! And whenever a vehicle or batch of them are paid off, guess what? He trades them away and replaces them with another financed vehicle. Guess he wouldn't get near a superlighter flat!!
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