Tenant referencing allows landlords and letting agencies to check that you are who you say, that you can afford the rent, and that you’ll look after your new home.
For tenants, renting from a landlord or via an agency that is diligent in carrying out referencing is a good thing – it gives you confidence that they’ll be professional and attentive in other respects too.
But tenant reference checks can be nerve-wracking, and there are several reasons why you could fail them. So, before putting in your application, brush up on some of the most common causes of failed tenant referencing – and how to avoid it.
1. Affordability
To pass an affordability check, your gross salary usually has to be at least 2.5 times your share of the rent. This is a common cause of a failed tenant reference check.
2. Adverse credit history
Adverse credit history, which might include County Court Judgements (CCJs) against you, stays on your record for up to six years, even if your current financial situation is good.
3. Lack of credit history
Missed payments or debt will negatively affect your credit score. Younger tenants or students may have a low credit score, not because of financial issues, but simply because they have not had any credit.
4. Poor references
Checks will involve getting references from previous landlords, to find out how you behaved as a tenant and whether you kept up with the rent payments. If former landlords don’t provide a good reference, you may fail.
5. No proof of address
If you can’t provide adequate proof of address through utility bills and bank statements, you may fail the referencing.
6. Gaps in employment
A gap in your employment record, other than paid holiday leave, may trigger alarm bells. If you are employed on a temporary basis or on a zero-hour contract, you may also fail the referencing.
7. Recent self-employment
If you have recently gone self-employed, you could fail tenant referencing checks, because you will not have been able to demonstrate your income over a 12-month period or more.
How to avoid failing tenant reference checks
Secure a guarantor
If you are at risk of failing the affordability checks, or your employment status could cause issues, you can appoint a guarantor. This is a person who, as long as they pass the same reference process, legally agrees to pay the rent if you cannot.
Be honest
Don’t wait for problems to arise – if you know of something that will appear on your record, such as adverse credit or employment gaps, being upfront about it from the outset will stand you in good stead.
Be organised
Get your paperwork together in advance: utility bills, bank statements, your passport and visa if necessary, and let your referees know to expect a call from the landlord or agency.
Decide who pays what
If you are renting with another person, it will be assumed that you will split the rent evenly – unless you say otherwise. So if one of you has a higher income and will pay more of the rent, tell the landlord or letting agency to avoid failing the affordability check unnecessarily.