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Effects of a bad credit rating on renting a property?(21 Posts)
DH and I rent. We've been in our current property for a couple of years but now need to move.
We've had a hard time financially since our last move: missed credit card payments and a huge overdraft. Credit cards are in DHs name and the overdraft is joint. DH is on a debt management plan. No CCJs or IVAs or anything.
We'd be subject to credit checks for a new house and I wonder if anyone knows if these kind of debts and lagging payments would make us fail?
Ww successfully got a new bank account 3 moths ago, if that gives any additional clue.
If the new agents do a credit check (most of them do), then you will fail if you've missed credit card payments. You could offer a larger deposit or a guarantor, you'll have to check with the agents though as they are all different. If you have a new basic bank account then this won't mean anything I'm afraid, anyone can get one of these. The agencies want to know that you're able to pay your rent.
If debt is in DH name, put new rental agreement in yours.
Thanks LadyMary thats useful to know. This agency do allow a guarantor. We've never missed a rent payment, so maybe a guarNtor would be useful.
Thanks too, to Mum2Fergus: the agency require an application for each adult living there. Hubby earns more than me; we wouldn't afford the rent on my wage (and I do freelance contracts) so he'd have to go on there.
We're doomed, aren't we?
A reference from your current landlord might help...
Okay, so our current Landlord as Guarantor seems like a good idea - when would you suggest this to the agency?
The credit checks haven't started yet, so should we offer the Landlord prior to the process starting? Or do it when/if a problem is identified?
We really need to move as out current property is just too small since the arrival of DD2 earlier this year. There was very little room for swinging cats before; absolutely zero now!
Last year I worried about Christmas because I didn't know how we'd afford it (cue DH taking out a credit card so we could buy our family presents). This year, I'm worried because there is no room for more toys. A much, much better problem I admit. Although our money situation has improved (DH sought a higher-paid job and succeeded, whilst I took on a new contract) I'm worried about the legacy of having run up debts, which we have struggled to repay. It's not like we were living extravagantly: we borrowed just to make ends meet.
Anyway, I love this new house I've seen; I really want it for us. It's literally a 2 minute walk from DD1s school ...
Oh, by the way, would doing an Experian credit check on ourselves (or just DH) be beneficial?
My friend said that what appears on there is what the agency would see, whilst DH thinks that there are other Experian-like companies that the agency could refer to, each with their own level of data.
Thanks everyone for your replies so far
Credit expert will give you a report from the 3 key agencies used for credit checking, but there is a fee. You can do it online but it depends when you need it done for. Besides, will the report really tell you anything that you dont already know. If it were me, Id go through the process for the new rental and deal with anything that comes from it.
Honestly though I think you should have a good look at your finances. If you're already struggling, how will you cope with higher rent (Im assuming this as its a bigger house, moving costs, increased fuel bills for heating, higher rates, etc.
On the guarantor side, I may be wrong but I understood a guarantor to be a personal association, someone financially liable should you incur arrears. Your current could vouch for his experience with him ti date but he cant speak for your financial future.
My tenants failed their credit check - in spectacular fashion (44k worth of CCJs), but they gave me an explanation (not too dissimilar to yours) and I still took them (although I did have to put in writing that I was acting against the agencies advice).
They have been with me a year now and there are no problems. My previous tenant passed her credit check and wrecked my house costing me thousands. Hence now I make the decision based on 'gut feeling'
We failed a credit check (on account of being self employed and having no credit history). The agency/landlord said the only way they could take us on was if we paid 6 month rent up front.
This is the first landlord who has said that - because they use the agency's revenue insurance scheme. Before that we have had landlords that don't use the scheme and go by "gut feeling".
Good luck you may have to shop around or find the money up front.
My DH doesn't have a great credit history so I was upfront with the rental agency about it, and they just asked the landlord if he minded. He came and met us and was happy for us to move in based on that meeting. I know it feels like everything in life is 'computer says no' these days, but I think rental agencies experience this a lot and are usually happy if you are honest about it and offer a guarantor. Hope it works out for you!
Lots of food for thought on here. It been good to read posts from people who've been in this situation, as well as from a Landlord who took a calculated risk.
We've increased our household income, so the relatively small increase (£150 approx), is an affordable one now. Let's just hope that the ghosts of not-so-long-ago financial past don't haunt us!
Thanks again all
Oh, and it's a bigger house, but not much bigger, so bills would be the same-ish, I imagine.
I'm a landlord and personally I would not take on tenants who had failed a credit check (regardless of how nice they are I'm afraid!). Even with a guarantor I'd be unwilling.
I have to agree with the previous poster about reviewing your finances. In the last twelve months you took on unsecured debt to buy presents (have you paid all this back yet?). Your DH is already on a debt management plan. Your priorities should be paying off your existing debts, building up your savings (especially as you are freelance) and only then consider increasing your outgoings. Inflation may wipe out your increased income before you know it I'm afraid.
not doomed at all with a reference and guarantors - but if your landlord knew you prioritise Christmas
tat presents over the bills, he would run a mile. I think you have bigger issues.
repeat after me: Christmas is nonsense and does not matter. The children will enjoy the holiday, time with their parents and do not need presents, especially if the house is already crammed full.
The family are grown ups, as are you, and you have to have a frank talk to arrange a mutual no-presents pact. Also saves loads of time buying pointless rubbish.
I think that my point about Christmas has been taken out of context.
We didn't have a credit card for willy-nilly Xmas spends. After all our bills had gone out, we had about £50 left each month as spare cash. That makes for a very miserable existence. No money to save; no holidays; no meals out; no nice treats. I was at the point where buying my daughter a coat for school meant trawling eBay for something under £10.
The debt management plan enables us to face our debts and pay those we owe. We're not reneging on that, though it will take quite a
long time. Our current property is teenytiny ... Of course, ideally
we'd pay our dues, save and only then make a move. But when you're thinking of buying a sofabed to sleep on downstairs so that your children will have your bigger bedroom, you kind of know that you need to take the risk and make a move.
Most people have debts these days (credit cards, loans etc), you're not by any means in the minority. It must have been a frightening and stressful time for you both when you had so little left each month, and you've done well to get where you are now. After experiencing such money worries (which can make life miserable very quickly) I doubt that you would be rushing to put yourselves in the same position again without thinking it through properly, so I'm sure that you will manage fine financially in your new house. You tend to come out of financially terrifying situations as a budgeting supremo anyway, and I don't think that ever leaves you afterwards.
I am thinking of renting a property and is dreading the result having a bad credit history I fell into debts over the years when my 31 year old son had serious mental health problems and my man left me with a 2 months old baby, my son lives in Jamaica and i lived in the uk paying all the psychiatric bills, buying medication, food,clothing shelter and looking after my daughter now 10 years old was and is a challenge on its own. I now hold down two jobs have a debt repayment plan and is struggling to get some where to rent. I pray some good landlord would take me on knowing not every one gets into debt because of choice. thorough my struggles I never owe my rent. I can get excellent refrenceces from previous landlord but my credit score is a road block getting a place of my own since i relocate because of my new job
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