If you’re applying to move into a new rented home, most responsible letting agents will order a reference check on you. This is nothing to worry about — it’s the agent’s job to perform some basic checks to make sure you’re not using a fraudulent identity and that you’re roughly in the right area financially to pay the rent on time.
This is important to the agent as they need to offer to the landlord only tenants who are likely to cause no problems.
Around 95% of reference checks come back totally fine. You’ll need to fill in a form and disclose a range of information, for example previous addresses and employment details, but it shouldn’t take long and generally there’s nothing to worry about.
The process can take anywhere from a few hours to a few days, but we normally aim for about a 24 hour turnaround.
Once you’ve filled in your application form we will perform a range of checks including verifying your employment (where applicable), retrieving your credit score, etc. Once we’ve collected all of this information, assuming everything checks out okay, we’ll send a positive result back to your letting agent and they can start the process of moving you in to your new property.
The short answer is — probably. Over 95% of reference checks come back fine.
In this day and age, it’s sensible practice for everybody to keep an eye on their own credit history, just in case mistakes crop up or unpaid bills you don’t know about are holding you back. You can do this via our credit checking partner, Equifax, here. We’ll also make a practical assessment of your finances taking into account any wages, savings, benefits, grants etc which you may have.
Depending on the exact circumstances the formula can vary, but as a rule of thumb, tenants must have either a total monthly income of at least 2.5x the monthly rent, or savings equal to 2.5x the annual rent, or a combination of both.
Depending on your circumstances credit history problems can often be resolved by naming a guarantor. If there’s a problem with your credit history we’ll call you and discuss your options and the possibility of a guarantor.
For guarantors, the same formula applies, but guarantors must make 3x the rent, as they have their own living costs to cover.
Sometimes, for a number of reasons, it may be necessary for a tenant to have a guarantor. Essentially, this means a second person signs the tenancy agreement as a form of insurance — in the event of the tenant failing to pay the rent, the guarantor is obligated to step in.
This provides peace of mind to the letting agent and landlord in circumstances where the tenant’s employment may be in jeopardy, their credit history is poor or for any other reason it seems more likely than normal that the tenant may not keep up rent payments.
As a guarantor, you will need to pass a reference check. The guarantor wouldn’t be worth much as a form of insurance if they themselves were unemployed or not financially able to support the rent.
As such all guarantors need to be referenced to verify that they’re financially suitable to stand as a guarantor. It’s a simple process and doesn’t usually take more than 10 minutes of your time. In 95% of cases there’s nothing to worry about. In the vast majority of cases the guarantor in a tenancy actually has to do nothing.
The guarantor is there as a form of insurance to provide peace of mind to the landlord and letting agent. In the unlikely event that the tenant ceases to pay the rent, the guarantor would be legally liable to pay in their place. Although this is very rarely necessary, it is non-the-less a fairly serious legal commitment from the guarantor, and should not be taken lightly.