Why would you fail tenant referencing?

Are you in the process of securing a rental property but are worried about passing the tenant referencing stage?

From financial aspects like credit history and income verification to past rental experiences and criminal background checks, the referencing process is designed to ensure a smooth, secure landlord-tenant relationship. 

Here, we explore common factors that might lead to you failing referencing, providing valuable insights to help you navigate this crucial phase with confidence.

Understanding these potential pitfalls can empower you to make informed decisions and foster a positive renting experience for all parties involved.

Poor credit history

A history of late payments, defaults on loans, or a low credit score could lead to your failing tenant referencing. Landlords often use credit checks to assess a tenant's financial responsibility.

A poor credit history suggests a potential risk of non-payment of rent or other financial obligations.

Insufficient income

If your income doesn’t meet the required criteria set by the landlord or letting agency, you may fail tenant referencing.

Landlords typically look for tenants whose income is sufficient to cover the rent and living expenses comfortably. Failing to meet these financial benchmarks can be a red flag for potential payment issues.

Previous rental issuesPast problems with previous landlords, such as eviction notices, disputes, or a history of property damage, can also increase the likelihood of failing tenant referencing.

Unstable employment

Stability in employment is crucial for landlords to ensure a tenant's ability to consistently pay rent.

If you face issues with employment verification, such as being unemployed or having an unstable job history, this could raise concerns during the referencing process.

Criminal record

Having a criminal record, especially one related to financial fraud or violent offences, may lead to a failed application.

Landlords prioritise the safety and well-being of their property and other tenants, so a history of criminal activity can be a significant deterrent.

If you fail tenant referencing, the implications can vary depending on the landlord or letting agency's policies.

It’s important to bear in mind that it isn’t necessarily the end of the road. Here are some common outcomes:

Application rejection

The most straightforward consequence is that your rental application may be rejected.

Landlords often use tenant referencing to assess the risk of potential issues such as late payments, non-payment of rent, or property damage.

Need for a guarantor

Some landlords may still consider your application if you can provide a suitable guarantor.

A guarantor agrees to cover your rent or other financial obligations in case you cannot do so. This person typically needs a stable income and a good credit history to be eligible.

Higher deposit or rent in advance

In certain cases, a landlord might ask you for a higher security deposit or request that you pay several months of rent in advance to mitigate the perceived risk associated with your tenancy.

Additional references or explanations

If the referencing process raises concerns, the landlord may request additional references or explanations.

Being transparent about your circumstances and providing context for any negative aspects of your referencing report may help move the process forward.

Consideration of individual circumstances

Some landlords may take individual circumstances into account and adopt a more holistic view.

For example, they might consider explanations for credit issues or other challenges and decide on a case-by-case basis.

Exploration of alternative properties

If one landlord rejects your application based on referencing, it's advisable to explore other rental opportunities.

Different landlords may have different criteria, and you may find a more suitable match elsewhere.

It's essential to communicate openly with the landlord or letting agency and, if possible, address any concerns they may have.

Understanding the reasons for your referencing failure can also help you to take steps towards improving your rental prospects in the future. 

Keep in mind that the specific outcomes can vary, and it's crucial to be aware of the terms and conditions set by the property owner or management.

We’re often asked, “what if I fail tenant referencing?” To which we routinely say: don’t panic. 

In 2024, we launched an industry-first tenant referencing solution, VISTA. With VISTA, the tenant referencing process is expedited from days to minutes, resulting in a significant increase in fraud prevention and real-time affordability checks. 

As a result, if you have improved your financial circumstances, VISTA will make your letting agent and landlord aware of the change in circumstance and your improved affordability and reliability meaning you may be likely to be considered for the property still.

Of course, there are certain circumstances that make it harder to pass the tenant referencing process. A violent criminal record is an obvious example.

However, in many other cases, if the concern is finance-related, there are extra measures that a landlord can take to protect themselves, alongside using VISTA, while still giving you the keys to their property.

Remember to be open and transparent during the tenant referencing process and flag any potential issues at the earliest opportunity.

Landlords often value honesty and may be more willing to find a compromise solution if you’re willing to explain your situation from the outset. 

There are also various workarounds that can help to mitigate a failed tenant reference, including a guarantor, rent in advance or a higher deposit. 

Now that you know some of the reasons why you might fail tenant referencing, you can take appropriate steps to improve potential weaknesses in your application and give yourself the best possible chance of passing all checks.

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