How To Rent A House With Low Or No Credit
It takes a while to build up a credit score in the UK. So many people who are new to the UK don’t have a credit history here, which makes it difficult to rent a house or flat.
Credit checks help landlords and letting agents get an idea of how reliable you are as a tenant, and whether you have any debts that might make it difficult for you to pay rent.
In this article, we’ll explore how you can rent a house if you have bad credit, or you don’t yet have any credit history in the UK.
Will landlords check my credit score?
Not all landlords perform credit checks. If your landlord wants to find a tenant quickly, they may not check your credit history.
However, some landlords and letting agents will want to check your credit score — but they need your permission to do so.
If you don’t give permission, your landlord or letting agent won’t be able to check your credit history. But they might assume you have something to hide. So it’s best to be honest and explain your situation. They may allow alternatives to a credit check (this might be beneficial for you, as a hard credit check can downgrade your credit score if it’s rejected).
Can I rent a house with bad credit?
Yes, it’s still possible to rent a house with bad credit. Private landlords and letting agencies will have their own criteria regarding who they allow to become a tenant. So you’ll need to discuss your situation with them to find out if they’re willing to accept you with low or no credit history.
Some landlords will let you take a different route to becoming a tenant. This includes:
- Using a guarantor
- Putting down a larger deposit
- Paying in advance
- Providing your credit history from abroad
Let’s explore each of these options in more detail.
Getting a guarantor
A guarantor is a person with a good credit history who agrees to pay your rent in the event that you’re unable to.
Essentially, they agree to guarantee that your landlord will get the rent you owe each month. That means if you can’t pay your rent, they will have to pay it on your behalf. So this isn’t a decision to take lightly.
If you decide to ask someone to be your guarantor, there are a few options:
- Ask a friend or family member — if possible, ask someone you know and trust to be your guarantor.
- Local bond or guarantee schemes — schemes in which the local council agrees to be your guarantor.
- Pay for a private guarantor — it’s possible to pay for a private guarantor for an upfront fee of around £250-£300 (the exact amount depends on your rent value).
A guarantor may need to give permission for your landlord or letting agent to perform a credit check on them.
Putting down a large deposit
Most landlords ask for a deposit when you rent a house. If you leave the house in good condition, you should get your deposit back. (It’s a good idea to choose a landlord who uses the Deposit Protection Service to protect your money).
If you have cash but no credit history, you can offer to pay a larger than normal deposit. This can help prove that your financial situation is sound, even if you don’t have a UK credit history.
Paying rent in advance
Likewise, if you have good savings but no UK credit history, you can offer to pay a certain amount of rent upfront. This will ensure your landlord receives their money, and you can rent a house with no credit.
Providing credit history from abroad
If you’ve recently moved to the UK, you may have a credit file from another country. If possible, get a copy of this in English and offer to provide it to your potential landlord or letting agency.
Can I rent a council house with bad credit?
Council houses are properties owned by the local council, and typically rented out at a lower rate than you might find in the private rental market. This gives people on lower incomes access to affordable housing.
Most councils don’t perform credit checks for getting a council house, as these schemes are designed to enable people without a strong financial background to have a place to live.
However, they may still ask questions about your affordability. You should answer honestly to avoid losing your home if it’s discovered your financial situation is different to that claimed in your application.
While the lack of credit checks is good news for people without a credit history, it also means council housing is in high demand. Many boroughs have waiting lists, and tend to prioritise vulnerable people and those with children. So depending on your circumstances, it may take some time before you’re allocated a council house.
How can I fix my credit score?
Alongside securing a home, it’s a good idea to take steps to fix your credit score. This will help when you want to renew your tenancy agreement, or even get a mortgage in the future.
You can build your credit score by:
- Disputing any errors on your credit report.
- Using a 0% interest credit card for small payments, and paying it off every month (immediately if you can).
- Avoiding payday loans if you have low credit.
- Not applying for credit if you’ve been rejected before.
- Opting in to Open Banking with your regular bank or credit union.
Learn more about building a credit score and securing a home in UK in these articles: