how to interpret and understand tenant referencing reports from credit check companies

How to Read a Tenant Referencing Report


When reading a tenant referencing report for the first time, it can be hard to know exactly where to start and what to look for. Selecting the right tenant for your property is the hardest part of renting your property, but knowing how to interpret a referencing report will help you make the right decision. 

This article will tell you how to read and interpret each part of an OpenRent comprehensive referencing report so that you can make an informed decision on your tenants.

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So, where to start? First identify what you’re hoping to get out of the referencing process. For most landlords their primary worries are:

  • Will the tenants be able to pay the rent? 
  • Will the tenants take care of my property and be respectful of  my neighbours?

Will the Tenants be Able to Afford the Rent?

The key sections of the referencing report to pay attention to are  Affordability and Credit Check.

Affordability 

This section will let you know whether the tenant will be able to afford the rent and how they will pay it. 

We can verify affordability by open banking and/ or referee. Both methods allow us to confirm that the applicant has enjoyed a stable, steady stream of income for a reasonable period of time prior to the tenancy starting.

Using open banking and referees allows us to verify income from a variety of different sources, including: salary, benefits, pensions and investments. 

Affordability calculations start at 35-40%. Meaning that, in order to pass, the rent will need to be less than approximately 35-40% of a tenant’s income.

Passed in Conjunction

Most tenancies in the UK are created as Joint Tenancies (whereby several parties are named on one agreement). This means that any one tenant or guarantor can be asked to pay the full amount owed by any or all of the other people named on the agreement, should it come to it.

Tenants will automatically be referenced for their share of the rent, however, even if they are not able to afford their share, they may still pass referencing ‘in conjunction’ with the other applicants if they can cover the rent together.

Credit check

The credit check section will tell you a great deal about the credit history of each tenant and their reliability for making payments on time.

OpenRent has partnered with Equifax, one of the leading credit agencies, to check a prospective tenant’s credit worthiness and if they have had any recent adverse credit events, such as county court judgements (CCJs), bankruptcies or insolvencies. 

The presence of any of these records on the applicant’s file can indicate that they’ve been in financial difficulty and may have had issues in the past managing their finances. This does not necessarily mean that they will continue having problems going forward, but it’s important to be aware of these things and we would always recommend that you discuss any issues with the tenant directly. 

Equifax will also  provide a summary of the credit data in the form of a score that gives  an idea of the risk that the tenant presents financially. The score is then graded from low to high to give you an idea what they think is an acceptable level of risk to take on.

Insufficient Information Provided

Please be aware that in some instances applicants may fail the credit check section with “Insufficient Information Provided.” This does not necessarily mean that they have poor credit, and therefore that they would be an unreliable tenant, it simply means that Equifax were unable to locate them in the credit record, and therefore were unable to verify that they have a clean credit history. 

There are many legitimate reasons why this might be the case, such as where a tenant has recently moved to the UK and does not have a credit footprint yet.

Will your Tenants Look After the Property?

There is no way to be certain of this, but the tenant referencing report does give you some insight that can help you manage your exposure to risk.

Tenant identity check

An obvious, immediate red flag. If your prospective tenant is not who they say they are then alarm bells should start ringing. The credit agency carries out several checks to make sure all the information the tenant has supplied to you is correct.

One of the most important ones is the address check. We will ask the applicant for a list of their most recent addresses and Equifax will check that these match the data held under their name at various sources, including the Electoral Register, utility providers and financial accounts. Their date of birth will also be checked across these sources.

If all these checks come back clear, then it is likely that the tenant is who they say they are.

Additionally we will ask tenants to provide a form of ID which you can use as another useful check on their identity.

Please be aware that when the tenant uploads their ID this does not constitute a right to rent check. You can read our full advice on how to fulfil your right to rent duties here.

Landlord reference

If your  prospective tenant was renting at their last address, we will ask them to provide a  previous landlord or letting agent referee. We will then ask if the tenancy was satisfactory and share these answers with you in the tenant reference report. Such questions include whether the rent was paid on time and whether the tenant treated the property well.  

And Finally

At the end of the day, it’s also worth remembering that the decision on vetting is yours and yours alone. As a self-managing landlord, you will have had the benefit of meeting your new tenants upfront,  and listening to your gut instinct is always a valid part of the referencing process.

There are also various paths available where a tenant fails referencing. You may ask them to provide a guarantor, pay rent in advance, or simply proceed as is if you decide that you are comfortable. 

When considering whether or not to request a guarantor it is worth noting that where the tenant has failed comprehensive referencing they will need a guarantor to pass in their stead in order for the tenancy to be eligible for rent guarantee insurance.

Originally posted September 2020, updated April 2023.


Start the discussion at community.openrent.co.uk


This article is not intended to form legal or investment advice. Investments in property are not guaranteed and can decrease in value as well as increase.

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