The credit reference is one of the main pieces of information available to landlords and their agents in determining the suitability of a potential tenant. Most people in the letting business would assume that if a tenant is taken to court and receives a court order to pay the arrears then this would show up on a credit check. According to some specialist lawyers this is not always the case. They have found that some county courts do not register the rent arrears or possession order against the tenant’s name and so they cannot be picked up by the credit referencing agencies. Apparently some county courts only register the order if the landlord decides to enforce it. This may be news to many landlord insurance policy holders.
Landlords are being advised always to enforce their rent arrears and possession orders to improve the chances of subsequent credit reference checks producing accurate results. You will be doing another landlord a favour if you do everything you can to make sure that the credit reference he or she obtains on your former tenant is as accurate as possible.
It is not just landlords and letting agents who depend on accurate credit reference checks. They are the cornerstone of rent guarantee insurance because rent guarantee insurers often insist on satisfactory credit references before allowing policy cover to apply.
The selection of a good tenant can make all the difference between your let property investment turning in a respectable income and being a financial disaster. Periods of unpaid occupation soon make a nonsense of any calculations about the rate of return on your property investment. It is even worse of the tenants have left the place in a bad condition. This piece of news is a worry to those of use who were quite happy to assume that if a tenant was taken to court and lost then this would show up on a credit reference check