To Check The Credit Worthiness Of Prospective Tenants
Landlords do credit checks to avoid financial complications with future tenants. Credit checks also enable landlords and letting agents to find out if the prospective tenant has any CCJs against them or has been declared bankrupt at any point.
A credit check gives the landlord an idea of what to expect from a tenant financially. Landlords check past evictions, credit irregularities, and debt load that presents a picture on how the tenant would behave with respect to rent payment; regularly and completely.
For Details On Past Tenancies
Financial complications aside, landlords and letting agents try to avoid tenants who have had issues in the past, such as extensive property damage based on carelessness and negligence, inability to take responsibilities in terms of their obligations as tenants, letting property to others without the consent of the landlord, carrying out or partaking in illegal activities, late or no payments on utility bills and all the other problems landlords do not want to face with tenants.
To Avoid Questionable Tenancies
Background checks and identity checks are run by landlords and letting agents to avoid letting their property to criminals. Criminal checks are also done by some landlords. There are usually financial costs applied to such tenancies when such checks are overlooked for whatever reason: money, time or familiarity with the tenant in question. In worst case scenarios, there may be a lockdowns on such property, and loss in income on it.
What Are CCJs?
County court judgements are court orders issued to individuals when they fail to pay money that they owe. When a person owes a creditor, and seems unwilling to pay, the creditor may apply to a county court for a judgment against the person to ensure they get paid. If the court decides there is indeed a debt to pay, a CCJ is issued, stating how the debt payment could be made.
When it comes to tenant referencing, CCJs definitely raise flags, but are not always a strike against prospective tenants. CCJs stay on a credit report for about 6 years and may have already been paid off. Landlords also check what the CCJs were for, if they were for rent or other housing-related reasons.