If you are a landlord, it’s a good idea to think carefully before you lease a property to a new tenant, and make sure that the tenant is in a good position to pay the rent on the property. Yes, there are legal protections that you can use to kick out tenants that don’t pay and can use the service of a debt recovery agency, but it’s better to avoid the issue as much as possible by checking their past behavior before even entering into an agreement with them.
You should tell the tenant that you plan to check their credit and their background when you start negotiating with them. Make it clear whether the tenant will need to cover the cost, and get permission in writing to perform the check, in case there are any concerns later on.
Not all prospective tenants will have long credit histories. Everyone needs to start somewhere, and if you are renting out small apartments, student accommodation, or ‘starter homes’ that might appeal to a young couple then you can expect that sometimes you will get applications from people with no history, or perhaps just a simple phone contract. This doesn’t have to be a dealbreaker. If the person has conducted their accounts well during that time, then you can always request a significant deposit if you have concerns, and monitor the status of their accounts carefully.
It would be unusual for someone to object to a credit check, and if they do, then that usually means that there is something that they don’t want you to see. If you can’t find someone on a credit check, this could mean that they simply have no history, or it could mean that they have done a lot of their transactions under another name (perhaps they often use a middle name, or they are recently married). Alternatively, they may have moved around a lot. There are plenty of reasons why someone may be acting in good faith and fail a credit check – but there are also plenty of red flags for you to look out for as well. So, think carefully before you accept any applications – intuition is a good thing, and something that could stand you in good stead – when you show a prospective tenant around a property, pay attention to the questions they ask and how they present themselves, then make a judgment call.