Credit Checking
Credit Checking: A Guide for Tenants and Guarantors
At Purple Frog Property, we understand that credit checks can sometimes feel like a hurdle. If you or your guarantor don't initially meet our referencing criteria, a low credit score can be confusing—but the good news is that your score isn't set in stone.
Understanding your credit report is the first step toward improving it. A solid credit score is vital not just for securing a tenancy, but for many aspects of your life, from mobile phone contracts to mortgages.
What is a Credit Score and Why Does it Matter?
Your credit score is a numerical representation of your financial reliability. It is a tool used by lenders and referencing agencies to assess how well you manage your money and whether you make payments on time.
* A high score signals that you are a responsible borrower, making it easier to secure rentals and loans. * A low score may suggest you are a higher risk, which is why we may ask for further information during your application.
How to Check Your Credit Score for Free
You don't need to pay to see your credit information. In the UK, several reputable services provide free access to the reports that referencing companies use.
1. Free Credit Reference Agencies
There are three main agencies in the UK. We recommend checking at least two to get a full picture:* Experian: Sign up for an "Experian Free Account" on their website to see your score and report. * TransUnion (via Credit Karma): TransUnion partners with Credit Karma to provide free, unlimited access to your credit data. * Equifax: You can find a free credit report by searching for "Equifax free credit score" online (note that some premium features may require a fee after a trial period).
2. Through Your Online Banking
Many UK banks now show your credit score directly in their apps. Look for sections labelled "Financial Health," "Credit Score," or "Insights."* Lloyds & Halifax: View your TransUnion score under the 'Borrow' tab. * NatWest: Powered by TransUnion, found in the mobile app profile menu. * Barclays: Provides periodic FICO score updates for cardholders.
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Why Your Score Might Differ Between Providers
It is completely normal for your score to be different on Experian than it is on TransUnion. This happens because:
- Different Data: Not all lenders report to every agency.
- Different Models: Each agency uses a different mathematical formula to calculate your "score."
- Update Times: One agency might receive information about a paid bill faster than another.
The Electoral Register: A Common Reason for Low Scores
The most common reason for a low score—especially for students or people new to the UK—is not being on the Electoral Roll (the voting register).
Why it matters: Agencies use the electoral roll to verify your identity and current address. If you aren't registered, it is much harder for them to confirm who you are, which automatically lowers your score.How to fix it: It takes five minutes to register at www.gov.uk/register-to-vote. You do not have to actually vote if you don't want to, and you can opt out of the "open register" so your details aren't used for marketing.
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Other Factors Affecting Your Score
* Payment History: Late or missed payments on credit cards, phone bills, or utilities are the fastest way to damage your score. * Credit Utilisation: Using too much of your available limit (e.g., being constantly at your credit card limit) suggests financial "stress." * Number of Applications: Applying for multiple loans or cards in a short space of time makes you look like you're in financial trouble. * Public Records: CCJs (County Court Judgments) or bankruptcies will stay on your report for six years and significantly lower your score.
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When We Might Ask for Your Credit Report
If our internal referencing check isn't quite enough to approve your application, we may ask you or your guarantor to provide a personal credit report. This helps us take a broader, more up-to-date look at your financial standing.
What your report must show:
To accept a manual report, it must clearly display:---