The last thing a landlord wants is to be stuck with a tenant who cannot afford to pay the rent on time. Whilst personal references once sufficed for tenants seeking rental accommodation, these days they are more likely to be asked to sign a form giving the landlord permission to call up their credit report. The information contained in the credit report is often just a starting point for some landlords who pay for full screening tests on applicants as they not only want their rent paid but don’t want to be stuck with a problem tenant such as a terrorist suspect, sex offender or known criminal.
Credit reports do provide quite a lot of useful information though as a report which shows that the potential tenant is always a timely payer bodes well for the landlord being paid. However the report will not reveal how much cash the applicant has in the bank but it will show if they are up to their limit in debt. A credit report which reveals a history of late and missed payments, judgments or bankruptcy is a pretty good indicator that the landlord could well end up whistling for the rent money.
Some landlords may also take a leaf from the trend started by insurance companies to consider that those with timely payment histories are also going to be more responsible in general. They may well look after their rented home better than late payers who the insurance companies penalise on the presumption they just don’t take care of things in general as well.
A potential tenant may not possibly realise what data is contained within their credit report and have told you they work as a bank manager, only to have their credit report show they work in the local abattoir. Whilst that is perfectly acceptable employment, the landlord would conclude that the tenant was dishonest by lying about their occupation.
The credit report also lists previous addresses which is convenient if the tenant says they have always lived at home with Mummy, but the report shows plenty of movement around between rental addresses. If there is a lot of moving around between accommodations the landlord may well question why. It could be a simple case of the tenant improving their accommodation as funds allowed, rather than necessarily indicating the tenant was constantly evicted. At least the credit report will show the facts allowing the landlord to ask why.
It is only to be expected that landlords take the sensible precaution of checking a tenant applicant’s credit report as they are above all looking for a suitably responsible tenant who can pay their rent on time. Whilst a credit report can in no way predict the future it is at least a reliable indicator of the applicant’s previous financial footsteps and represents their financial reputation.