When renting, there are a number of referencing requirements that you must meet, in order to have the right to rent the property under affordability.
Landlords and lettings agents generally check for any adverse credit, or CCJ’s that may appear on your file so it’s always best to be open and honest in the first place. Having poor or bad credit doesn’t necessarily mean that they will decline your application, it just means that they may require a bit more information from you, in order to proceed with your application.
Amana Lettings have compiled a list of a few things to help increase your credit score:
Check addresses on your file
It’s one thing people often miss. Check your address is up to date on all active accounts (even if you no longer use them). Not when renting, but there’s a story where one woman didn’t get a mortgage because her unused but still active old mobile contract was listed at a past address. Anything unusual causes lenders to worry.
Break with past relationships
Write to credit agencies asking to be delinked from any ex you had joint finances with. This stops their credit history from affecting your applications.
Build / rebuild your score
If you have a poor credit score, it takes time to rebuild it. Perversely, one way to do it is to get a credit card and spend on it each month. This proves to lenders you can borrow responsibly. Yet only do this if you ALWAYS repay in full to avoid interest. Put about £50 on it each month, clear it each month for a year, and it should help. If your credit rating isn’t good enough to get a normal card, see the bad credit guide for how to get a card.
Time it right
Issues such as county court judgments for unpaid bills are wiped from your record after six years, so wait for that until you apply. Applications only stay on your file for a year, so if you’ve a raft of those (eg, lots of credit cards) then wait.
Don’t miss payments / pay late
Set up a direct debit to make at least the minimum repayment on credit cards so you’re never late and never miss a month. It’s always better to repay more, so make manual repayments on top when you can. Keep other applications to a minimum in the months before a mortgage
Applications, whether successful or not, go on your file, so space out applying for anything that adds a footprint to your file (including car insurance and mobile phones). The worst thing is a lot in a short space of time as it makes you look desperate for credit. Prioritise your mortgage if that’s the most important thing, and hold others off until you’ve got it.
Never withdraw cash on a credit card
This is specifically noted on your file. It’s frowned upon as it’s incredibly expensive and not a good sign. It looks like you’re desperate for cash and can’t live within your budget.
Never apply after rejection
Always check for errors on your credit files before applying for anything else. If not, even if you fix an error later on, all the footprints from rejected applications may kibosh your ability to gain credit anyway.