How to Rent With Bad Credit
Here are some tips on how to rent with bad credit.
Have you found that your credit history is preventing you from renting a property? Or, are you worried that it could?
You’re not alone. Many people find themselves in this situation.
However, there isn’t one universal rule. Some landlords and letting agents will see it as a huge stumbling block, while some will not.
How to rent a house with bad credit
- Check your credit score
- Find out what the landlord can see
- Be upfront and honest
- Get a guarantor
- Allow for changes to the tenancy agreement
- Provide references
- Provide evidence of income
- Offer a large deposit
- Try building a relationship
- Pay rent in advance
Can you rent with bad credit?
Not every landlord will look into your financial background. This is more likely to be the case when renting privately. This is not to say private landlords don’t run credit checks, but it’s important to be aware there isn’t one rule that applies.
So, contrary to what some may believe, it is possible to rent with a bad credit rating. However, this doesn’t mean it’s always plain sailing. Don’t underestimate the importance of your credit score when renting.
To give you an idea of where you stand, run a credit score check.
Tenant credit check – what does a tenancy screening look at?
So, can landlords do credit checks? Answer: yes and no.
It’s normal for most landlords or letting agents to carry out a background check, known as a tenant screening. These may or may not include a credit check.
Here’s an outline of what checks you can sometimes expect to undergo:
• Proof of identity
• If you can afford rent e.g. income, your bank accounts
• If you have the right to stay and rent in the UK
• Credit history
• References from previous landlords
• Guarantor information
A credit report isn’t the only thing a potential landlord is interested in. So, if you do get turned down for a rental property, it might not be the only reason.
Renting with bad credit – top tips
Realistically, just because you’ve missed a few credit card payments doesn’t mean you’ll neglect to pay the rent.
However, some landlords may not see it this way. For some landlords, a poor credit history can sound alarm bells. It may make them think that perhaps you can’t, or just don’t, keep up with your financial commitments.
But, this doesn’t mean it’s all over. There are some things you can do!
Here’s a closer look at how to rent a house with bad credit:
1. Find out your credit rating
First things first, find out what you’re up against.
Knowing your credit rating will help you organise your finances and take control. Plus, how will you convince a landlord you’re a responsible tenant if you don’t know your credit rating?
If you understand your situation – you can mitigate against it.
2. Find out what the landlord will see
In most cases, missed or late payments will not show on your public credit score. So, landlords and letting agents won’t be able to see these. If they are the only thing affecting your score negatively – you’re in luck!
However, of course, this isn’t the case for everyone. CCJ’s, or county court judgements, will show on your public score, as will bankruptcy.
There is an exception, however. If you’re signed up to a Rent Reporting scheme, missed payments can be seen. These are usually used to boost someone’s credit score, but can work against you if you fall behind on rent.
3. Tell the landlord upfront
If the landlord or letting agent will be able to see your credit score during the tenant check – be upfront.
Tell them what they need to know before they find out!
Being open and honest should always be one of the first steps for those wondering how to rent a house with bad credit. This will make you appear a much more trustworthy and reliable tenant.
4. Get a guarantor
In some instances, such as renting to students, a guarantor is usually expected. But, some potential tenants aren’t asked for one.
However, if you’re renting with poor credit, you may be asked to have a guarantor. You could also offer this option to your potential landlord if they’re having doubts about taking you on. Your guarantor will be responsible for your rent should you fall behind, so can help reassure the landlord.
In most cases, your guarantor will need to be:
• Living in the UK
• Employed
5. Allow tenancy agreement changes
Sometimes, when renting with bad credit, a little compromise is necessary.
If a landlord makes some amendments to your tenancy agreement before it’s signed, it might be wise to allow them to do so. This is within reason, of course. Only allow changes that will help the landlord protect themselves.
Do everything in your power to make yourself seem like an agreeable and hassle-free tenant.
6. Offer references
If you’ve rented before getting a reference or endorsement from a previous landlord is a great way to get potential landlords to trust you.
Ideally, these should show you in a glowing light, affirming that you’re reliable, can pay rent on time and take good care of a property.
7. Provide evidence of income
A landlord or letting agent’s top priority will be to ensure their rent is paid on time. So, show them that you can do just that!
Provide evidence of your monthly income, proving to them you’re a responsible person to let their property to.
8. Offer a larger security deposit
This won’t be a possibility for everyone. However, if a landlord or letting agent is doubtful about whether to take you on, make things easier for them.
Assuming you can afford to do so, offering a slightly larger deposit than requested might help alleviate a landlord’s concerns. Alternatively, finance permitting, offer to pay two or three months’ rent upfront.
9. Build up a relationship
If you want a potential landlord to see you as reliable, let them get to know you.
Sometimes, when applying to rent, your bad credit history might be difficult to look past. So, try and counteract this by demonstrating your efficiency and enthusiasm and keeping communication lines open, while being responsive and friendly at all times.
It’s advisable to give them no reason to doubt that you would make a great tenant. Good credit is one thing, it doesn’t necessarily mean someone will make their rent payments on time. Building up a rapport with the landlord will allow them to see you as responsible and reliable.
10. Pay rent in advance
If your circumstances allow it, you could pay a lump sum of rent in advance. This could be 6 or 12 months’ rent, for example. While not possible for everyone, it will reassure the landlord that they won’t be out of pocket – and help if you don’t have a guarantor.
How to rent with bad credit and no guarantor
Many of the tips above can apply even if a family member or friend can’t guarantee your rent.
However, if your potential landlord is insistent on it, you could look into using a guarantor service. But, bear in mind this will be an extra charge; expect to pay around £300 or more.
There are certain criteria you must meet, including signing a contract, proving your identity and ensuring you earn at least 1.5x your rent.
Have you found the right property?
Your credit history isn’t your only concern as a potential tenant! You might not be buying, but you should still make sure you’d enjoy living in the area. You’ll want to gather as much information as possible, from crime rates to who the neighbours are. A property report can tell you all of this and more. Get your full report here.
Want to achieve financial health?
We’ve teamed up with Canopy, an app that puts the power (literally) in your hands. It makes vetting painless, helps renting count towards your financial health, and offers a range of handy features, such as a budget tracker. Want to find out more? Here’s how to achieve financial health when renting.
Last Updated: November 1st, 2024
