Do You Need a High Credit Score to Rent a Home?

5th Nov 2024

If you’re thinking about making the move to a new property, you’ll be aware of the hurdles to jump through, including going through a credit check to make sure you have enough income to pay the rent. While there isn’t a specific credit score number that you’ll need to rent a property, having a good credit score can make the process smoother. A good score indicates a reliable borrowing history, which can reassure landlords that you’re capable of making regular rent payments.

What is a Credit Score?

A credit score is a number which indicates your creditworthiness, based on your credit history. Landlords, like lenders, use this score to gauge how likely you are to meet your financial obligations. Various factors can affect your score, either positively or negatively. There are three main credit reference agencies in the UK - Experian, Equifax, and TransUnion. Each company uses different scales to rate your score, so don’t get hung up on the exact number. The general rule to remember is that a higher score indicates a better credit record.

Why Credit Scores Are Important

Credit scores are not only used for assessing income for renting but also for obtaining loans, mortgages, credit cards, and other financial products. A higher credit score means that you are seen as a better financial risk and someone who is more likely to pay on time every month. If your credit score is not as good as it should be, then you might find that you are getting turned down by landlords in favour of another tenant with a better financial history. There are several steps you can take to improve your credit score, such as making sure you have a system to make payments on time and avoid defaults, getting registered to vote and managing your credit responsibly.            

Before house hunting, check your credit score to identify any potential issues and address them in advance. Most major providers offer online credit score checks, though some may charge a fee.

What to Do if Your Credit Score is Low

If your credit score is low but you're confident in your ability to manage rent and finances, then there are some other things you could offer your landlord to make yourself more attractive as a tenant and secure the property. These include:

·        Offer a Larger Deposit: Paying several months' rent upfront, if allowed to do so, can reassure landlords of your financial stability.

·        Provide Proof of Income: Show payslips or bank statements to prove you have the money coming in each month to pay the rent.

·        Use a Guarantor: A guarantor, usually a parent or other relative, can provide security by agreeing to cover rent if you can’t.

·        References: A reference from an employer or previous landlords can help show you’re a responsible tenant.

·        Roommates: Sharing rent with a partner or friend can make rent more affordable and reduce financial pressure.

Always be honest with a potential landlord about your financial situation. Nobody is going to want to rent you a property if they think you can’t be trusted.