Landlord Tips

What is Tenant Referencing?

Hands of agent and client shaking hands after signed contract buy new apartment.

One of the biggest challenges that landlords can experience is dealing with problematic tenants. From property damage and anti-social behaviour, to missing rent payments, bad tenants can cause landlords major headaches. Going through the eviction process can be expensive, as well as stressful, so landlords will want to avoid this at all costs.

Although there is no guarantee on how reliable a prospective tenant will be, there are some vetting processes landlords can complete to minimise the risk of choosing a tenant who could cause problems further down the line. An important element of this vetting process is tenant referencing.

What is tenant referencing?

Tenant referencing involves a set of checks to assess the suitability of prospective tenants. 

The checks are performed by a third party tenant referencing organisation such as  through a letting agents or the landlord and will help provide a better picture of how reliable and financially stable the tenant is. Putting the work into finding a good tenant could save you a lot of money and hassle in the future.

What does tenant referencing involve?

The more comprehensive the tenant screening process is, the more likely you are to uncover potential issues. There are several different checks that are generally used for tenant referencing:

  • Right To Rent Checks
  • Employment References
  • Open Banking
  • Tenant Onboarding
  • Contract Free
  • Landlord References
  • Credit Checks
  • Company Credit Checks
  • Guarantor Checks

Credit check

The financial background of your tenant will be a big indication of whether they will keep up with their rent payments. There are several credit reference sites you can use to complete credit checks on tenants, such as Experian and Equifax. If a tenant has a poor credit score, they are a higher risk for non-payment of rent.

Employer reference 

Landlords will often ask tenants to provide evidence of their employment history and an employer reference with company headed paper or from a company email address. This should help determine whether their income will cover the rent and bills and whether they have a stable job.

Previous landlord reference

Tenants who have lived in rental accommodation before should be able to provide contact details for previous landlords. You can check with the landlord whether there were any problems with the tenant.

Proof of ID

To check that the tenant is who they say they are, they should provide photo ID such as a passport or driving licence.

Bank statements

It is also common for landlords to request bank statements from tenants so that they can check that their income and spending habits will allow them to afford the monthly rent payments. Usually, the last three months of bank statements are requested.

Proof of address

Checking the prospective tenant’s current and previous address is another important part of the tenant screening process. Acceptable documents for proof of address include recent utility bills, council tax bills, bank statements and driving licence.

Right to Rent checks

Landlords have a legal requirement to check that tenants are permitted to rent a property in the UK. This involves checking a tenant’s ID and any immigration documents if they are not British citizens. You can get more information about how to complete the right to rent checks on the website.

Do you need a tenant’s permission to do a credit check?

Credit Check Financial Accounting Request Form Concept

Yes, you must obtain a tenant’s permission before you run a credit check on them. If they do not agree to the credit check, this could be an indication that they have a poor credit history and may be unreliable at making their rent payments.

Using a guarantor 

In some circumstances, landlords may allow the tenant to use a guarantor who will assume financial responsibility for any missed rent payments. This is sometimes a good option if the tenant has little credit history because they have always lived at home with their parents. Some landlords ask for a guarantor if the tenant has a poor credit history.

How to complete tenant referencing

Landlords can follow the steps listed above to do the tenant referencing themselves or they can use a letting agency to do it on their behalf. Even if you do not want to hire a letting agent to manage the tenancy, you can usually pay a one-off finder fee. This includes finding a suitable tenant and conducting all the required checks to meet the necessary legal requirements and help ensure you have a reliable tenant who looks after your property.

We provide a comprehensive tenant referencing service to help landlords to find the most suitable tenants for their rental properties. Contact us today to find out more.


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