If a Tenant Fails Their Tenant Check Then Always Use a Guarantor

If a Tenant Fails Their Tenant Check Then Always Use a Guarantor

It can sometimes be the case that a tenant will fail their tenant check or not get a appropriate reference for a landlord or letting agent to feel comfortable leasing out their character to them. It is in this situation that a landlord would ask their tenants to provide a guarantor. A guarantor is someone that the tenant knows who will guarantee rental payments or any other tenancy obligations in both residential and commercial leasing.

The guarantor acts as an insurance policy against the tenant defaulting on rental payments and they will cover the cost of any expenses or damages inflicted on the character during the tenancy.

There are a few different factors which may affect tenant check credit scores, making them look like high risk tenants which would average the involvement of a guarantor.

o They have never borrowed money before and have no credit cards
o They have no fixed address and they are not on the electoral register
o They have lived in their past address for less than six months
o They have been living oversea and they have recently returned home
o They have been working for less than six months
o They are students / They are on a low income salary
o They have a history of debt, late payments and County Court Judgments on their record

If you need to check a guarantor then as a Landlord or letting agent you would run tenant checks such as obtaining a credit score and referencing as usual, as if it was a any tenant. The guarantor will be agreeing to the complete obligations in the tenancy agreement on behalf of the tenant they are acting as a guarantor for. These would include any rent arrears, damages to the character and any limitations.

The guarantor chosen is contracted to accept any legal limitations and can be sued if they do not follow by with this agreement. If you are unsure about a tenants financial responsibility, then getting a guarantor will help protect your character investment.

When you check tenant credit scores this can be done online, and most good online tenant checking sets will allow a landlord to run checks on a guarantor in addition as a tenant. Reputable sets should permit a landlord to run a tenant check on the tenants in addition as the guarantor at a later date should the tenant fail the credit score first.

A guarantor tenant check will bring back the following financial information and compile a credit score:

o If they are registered on the electoral register
o Any undisclosed addresses
o Any bankruptcies or insolvencies
o Any county court judgments (CCJs)

As a landlord you will want a guarantor who is in stable employment – especially If the tenant in question is not. Make sure you get a complete employer reference to verify any information the guarantor has provided to you. Check what salary they earn, if they are part-time, complete-time workers, and that the position they have provided you with is correct.

If a tenant has been oversea and has just returned home they will be looking for a rental character. You don’t need to turn these tenants down if they can provide a guarantor to act as their insurance. If however a tenant has bad debt and many CCJ’s you may not want the hassle of a tenant that does not pay on time. A guarantor is all about protecting you against the worst case scenario – it doesn’t average it wont happen, but if it does you are in the best position to cope.

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