Tenant Referancing Fees for credit checks

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    Tenant Referancing Fees for credit checks

    As a private landlord I have never charged my tenant any fees with the exception of £30 for their credit checks.

    As many landlords know many people are a waste of time who say they have good credit / referances etc but then the credit report comes back as a fail. As far as I'm concerned tif he prospective tenant reckond they'd pass the check & I made them aware the £30 was non refundable.

    Now of course I'm expected to pay.

    Is it not allowed to state something along the lines of, to apply for the property you must be able to provide a tenenat referance check, therefore making tenant pay for it.

    If they pass it then fine, I'm happy to knock the money off the first months rent, if they fail it then obviously I won't go further with them but as things stand, I'm the one whose £30 down.

    Any solutions out there?

    #2
    Ask if tenant can give you six months rent up front. If yes, I would not bother about all the other nonsense.

    Comment


      #3
      You can't force the tenant to pay someone or sign up to something.

      You can ask them to show you bank statements before accepting their application.

      You can charge a holding deposit of up to a week's rent.
      If the information given by the tenant prior to that point is shown by the credit check to be false, you can keep the holding deposit.

      Provided you can confirm to the tenants that you are only prepared to consider their application if they are likely to pass your requirements, which are:
      Confirmed income above £x per annum.
      A credit score of at least xxx.
      A reference from a recent landlord.

      Or whatever your criteria are.

      If the tenant confirms that they are applying on that basis, you would be entitled not to return their holding deposit if this turned out not to be the case.

      If I were a prospective tenant, I'd be turning up with my Credit Karma report (which the landlord couldn't ask me to sign up to) just to show that I was a decent prospect.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        Originally posted by jpkeates View Post
        A credit score of at least xxx.
        How are you going to get that without requiring the prospective tenant to "contract for the provision of a service", even if that service is free to use by the tenant?
        I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

        I do not answer questions through private messages which should be posted publicly on the forum.

        Comment


          #5
          Could a LL say 'Preference will be given to tenants who can provide a recent full credit report'. This way the T doesn't have to sign up to any 3rd party things and is still able to apply for the tenancy.

          Comment


            #6
            Originally posted by KTC View Post
            How are you going to get that without requiring the prospective tenant to "contract for the provision of a service", even if that service is free to use by the tenant?
            Change the requirement to be average or above rather than a number?

            Just seen that Credit Karma scores out of 710 (Experian score out of 999).
            God knows how they decided on a maximum of 710.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              Originally posted by jpkeates View Post
              ust seen that Credit Karma scores out of 710 (Experian score out of 999).
              God knows how they decided on a maximum of 710.
              They allocate points to each criterion then sum them.

              Experian like round numbers (they probably do the same then scale the result).

              Comment


                #8
                Originally posted by MdeB View Post
                They allocate points to each criterion then sum them.
                It makes as much sense as the scoring in tennis.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  Originally posted by jpkeates View Post
                  Just seen that Credit Karma scores out of 710 (Experian score out of 999).
                  God knows how they decided on a maximum of 710.
                  History, sort of. Noddle by Credit Karma was previously Noddle by TransUnion, which was previously Noddle by CallCredit before CallCredit was acquired by TransUnion. CallCredit/TransUnion uses a score out of 710.

                  Equifax uses a score out of 700, which explains by ClearScore which provide Equifax's score for free are out of 700.

                  As to why Equifax, Experian, and TransUnion uses different scoring system? Because they can of course!
                  I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                  I do not answer questions through private messages which should be posted publicly on the forum.

                  Comment


                    #10
                    Whilst a landlord must not require a relevant person to enter into a contract with a third party in connection with a tenancy, a landlord could simply ask applicants the question 'I can confirm my XYZ credit score is at least 123' and applicants have a choice a. Walk away as they do not know their XYZ credit score b. Check their credit files to confirm their XYZ score (the landlord has not required you to do this in connection with the tenancy) c. Take a punt knowing they have a good credit score and hope their XYZ credit score is at least 123 and accept if it is not they will lose their Holding Deposit

                    Comment


                      #11
                      But if the various credit reporting agencies all rate to a different scale, how could you say that you need to get over a certain number. You can't say "must be over 750" as credit Karma doesn't go that high.

                      Personally I think credit scores are rubbish. During the period of my life when I had the biggest financial issues is when I had the highest credit score. Now that I'm financially stable and don't get things on credit anymore, the score has dropped.

                      Which brings up another point, how could you ask someone who has no credit history, to have a credit score over a certain amount?

                      Comment


                        #12
                        Originally posted by cymro123 View Post
                        Whilst a landlord must not require a relevant person to enter into a contract with a third party in connection with a tenancy, a landlord could simply ask applicants the question 'I can confirm my XYZ credit score is at least 123'
                        What make you think a court wouldn't find that to be equivalent?
                        I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                        I do not answer questions through private messages which should be posted publicly on the forum.

                        Comment


                          #13
                          I think referencing is difficult.

                          Cleaning is relatively easy, as you can (try to) specify a standard of cleaning, and the tenant can avoid the fee by cleaning to that standard, either by ding it themselves, or buying the service on the free market.

                          It is likely to difficult to specify referencing in a way that allows a free market choice of supplier for all the information.

                          Comment


                            #14
                            I think a full credit report is more important than an actual score.

                            Comment

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