The referencing process explained

Obtaining references for future tenants is a very important part of the letting process. When done thoroughly we can weed out fraudulent people and also any adverse credit history.

“We endeavour to take the entire burden away from you”

With our experience we have refined our procedures so that the whole process is smooth from start to finish for all concerned. You can see a step-by-step explanation of our procedure on the right of your screen.

  • Landlord/Agents
  • Employment
  • Character references
  • Credit check
  • Electoral Roll/ RTR ID
  • Guarantors

When assessing all applications, significant consideration is given to how an applicant conducted their last tenancy.

In instances where applicants have had a tenancy before, references will be obtained from the current or previous Landlord/Managing Agent.

This would enable us to ensure that rental payments have been satisfactory, the amount stated is correct, the property was kept in good condition, conduct has been acceptable and notice has been given by the applicant to vacate the property.

If there appears to be any inconsistencies or discrepancies with a reference, then LetRef will investigate on your behalf.

  • Employed
    All details relating to the applicant’s current employment (and previous, where necessary) will be checked and verified. A basic salary figure, together with the length of service and position held, will usually determine our final decision, although commission and certain additional allowances may be taken into consideration when appraising the applicant. If we are at all concerned about the validity of the reference, we carry out additional company credit checks free of charge. Sometimes we ask for further verification such as bank statements and corresponding payslips. Some of our letting agents instruct us to collect three months personal bank statements for each application, applicants are instructed to upload these with their application.
  • Self-employed/Company Directors
    We will contact the applicant’s accountant, access information relating to the financial status of the applicant’s business (additionally supplying a company credit check when we think this will be helpful), ask for bank statements where no accountant is used and, if necessary, tax returns.
  • Retired
    Income from a Private or Company pension will be confirmed, through documentary evidence, accountants reference or six months bank statements. Any decision will be based on financial circumstances and satisfactory personal references.

We contact a personal referee and establish how long they've known the applicant and in what capacity. This gives the landlord a better picture of what sort of person the prospective tenant is.

We also ask them to confirm their own name, address and occupation. We keep this information on file for further reassurance to landlords and managing agents should be need to contact them at a later date.

Many other referencing companies don't bother with character references but we have found them helpful and provides an additional contact for the applicant should there be any future difficulties.

We will search databases for any County Court Judgements (CCJ’s), Bankruptcies or Individual Voluntary Arrangements (IVA’s) showing against the applicant’s name. We insist on having photographic ID and proof of address in order to carry these checks out as without these, we could not be sure of the accuracy.

You will be notified of any adverse credit history and the following details:

  • County Court where any Judgement/IVA or Bankruptcy was issued (if applicable)
  • Date of issue
  • Amount of judgement
  • Date satisfied if applicable
  • Any aliases

For each application, LetRef will carry out an Electoral Roll search to check for registration details at addresses provided by the applicant as well as checking the ID documents are appropriate for the new Right to Rent legislation.

Searches will also be carried out to locate any linked addresses for each applicant that may be found.

We always insist that we are provided with photographic ID and proof of address, otherwise it is impossible to guarantee the accuracy of a credit/electoral roll check. If applicants are not on the electoral roll they usually show links to the address and this satisfies us of their presence there, we can see past credit checks/electoral roll information at three linked addresses, no matter how far back they go. It should be noted that in some cases, applicants do not appear on the roll but as long as they are linked to an address this re-assures us. If an applicant shows no links at all to an address then we will investigate further and carry out additional checks at past addresses until we can locate them.

If an applicant has just arrived in the UK and an Electoral Roll check is not possible, we can validate ID such as Passports and Driving Licences. The new Right to Rent legislation also makes it mandatory for the agent to check the original ID documents in person in the presence of the applicant. We will check that the documentation is in order for the RTR check and point out any potential issues.

There may be instances where your applicant may have insufficient information or data available to assess and approve an application on its own merit. In such instances, you may wish to consider the option of including a Guarantor. The Guarantor will be reference checked in exactly the same way as the tenant. A Guarantor MUST be a UK homeowner - if your referencing company tells you otherwise you are not being given sound advice. A guarantor needs to earn 4 times the annual rent if a rent guarantee insurance policy is required or 3 times the annual rent if no insurance is required.

At LetRef, we will recommend the support of a guarantor for the following reasons:

  • Short-term contract employment
  • Income falls below the required level of 2.3 times annual rent (2.86 times annual rent for rent guarantee)
  • Temporary employment or unverifiable income
  • Where the applicant is a student
  • Should an applicant be currently unemployed
  • If the applicant has a CCJ or adverse credit