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Reasons why the landlord and the employer want to see your credit file
Mortgages, creditors and credit cards see your credit records, but did you know that lessors and prospective employers should also take a look at them? LandlordLandlords and letting agent will want to see whether prospective lessees can buy the real estate in issue and whether they have District Judgements (CCJs) or insolvencies.
But there is a boundary for the type of information they can get about prospective renters. In contrast to creditors and credit cards companies (who actually extend credit lines), those who rent out real estate can only see those parts of a credit review that are part of the official dataset, says Neil Munroe, outside affairs executive at credit bureau Equifax.
These include the processed voting roll (to check identity), all records of bankruptcies or seizures, and the ACJs. Since you do not take any pecuniary risk by leasing a house (as you would if you applied for a credit line), a credit check from a lessor will not reduce your creditworthiness, as would a creditor.
"Adding the find data set to the consumer's credit file to show that they have been compromised differs from a regular credit find to make sure they have no effect on their credit accessibility," says Munroe. Does a prospective lessor see if you have already repaid your current lessor on schedule?
Whilst information on mortgage payments is contained on more comprehensive credit statements, information on rental payments is currently not contained. That means that those who live in a private leased home and are paying rental on schedule have not seen this information on their credit report. Experian, another credit bureau, in March 2012 announces that it will shortly introduce the so-called rental exchange.
Meanwhile, lessors will be able to see whether prospective renters have fully and punctually repaid their rents to former lessors.
Some sector companies will look at a candidate's track records before they offer him a position or even an interview. While not all companies will check your creditworthiness, you may miss an occasion if you include in your reports yellow labels (such as CNJs and bankruptcies). Workplaces don't have everything in your reports, and their credit ratings don't hurt your credit.
"It is important to recall, however, that any organization must notify the person that it plans to do so before conducting a review," says Munroe. This will give you enough free rein to fix things before an unpleasant situation is seen by an employers in your reports, or perhaps to tell your prospective employers in more detail about any past misfortunes.
Review your reports for errors. However, if the worse things in your account are not errors, you can turn to the credit bureaus (Experian, Equifax and CallCredit) and ask them to allow you to clarify the underlying facts. When they are due to toughness, a prospective employers can give you a second opportunity.