How to pass tenant reference checks

Any letting agent worth their salt will undertake reference checks on potential tenants. Referencing is a vetting process to ensure only the most genuine, trustworthy and financially-sound renters can reserve a property.

If you’ve been a tenant before, you’ll know there are background checks on your employment and financial status, as well as investigations to establish whether you have the right to rent a property in the UK, and if you have a good track record with past landlords.

In 2022, figures from one tenant referencing and credit check company showed that an increasing number of tenancy applications were being cancelled by letting agents. In the first four months of the year, an average of 509 tenancy applications were voided by agents each month.

Vouch’s continuing analysis uncovered a worrying trend for cancelled applications as 2022 progressed. In August, 1,959 tenancy applications were voided per month – almost four times as many than at the start of the year. It is thought a large proportion of tenants whose applications failed had not passed referencing checks.

Lettings remains a competitive market so tenants should start the application process knowing that they stand a good chance of passing the referencing stage. It is possible to prepare in advance so you reduce the likelihood of being rejected.

Here are 4 key areas you should pay attention to:

1.     Finances

A tenant’s finances will be scrutinised. To pass, there needs to be evidence that a tenant has been using the same bank account for some time, having their wages paid in and not living off a huge overdraft. You may be asked to provide three months’ worth of bank statements to prove what money is saved and what current outgoings there are. 

Credit checks will specifically look at whether a tenant has a bad debt habit. Missed or late payments – whether it’s attached to a utility bill, a credit card or a personal loan – can be a cause for concern, as will a County Court Judgement (CCJ) against the tenant.

2.     Employment

As a general rule of thumb, a tenant’s income should be two and a half times the rental cost to pass referencing checks. As well as checking for evidence of the correct wage being paid using bank statements, it’s usual for the tenant’s employer to be contacted to prove the tenant is in safe, secure employment receiving the wage that has been stated. 

3.     Tenant behaviour

The referencing process will see the letting agent make contact with a tenant’s current and past landlords. They will ask about their conduct inside the property and whether the tenant has always paid their rent on time. 

4.     Right to Rent

Some tenancy applications are rejected as the renter couldn’t prove they have the right to rent a property in the UK. Passing this mandatory step of tenant referencing relies on the renter having the correct paperwork. This Government page displays a full list of acceptable documents when proving a tenant’s Right to Rent.

Don’t worry if any of the above concerns you. If you have a small blip in your credit history, never rented before or just started a new job, it is still possible to pass the referencing process. Please ask us for advice before you start any application as it may be necessary for you to provide a rental guarantor