Charges for tenant reference and credit checks

If you are applying to rent privately and a letting agent has quoted you a fee for a credit check or a reference check, the law in England, Wales and Scotland says you do not have to pay it. Landlords and letting agents cannot charge you for credit checks or other reference checks, and they cannot charge fees for these checks under any other name¹. In Scotland, official guidance is blunt about it: landlords "should not charge a fee for doing a credit check for you or your guarantor. These are illegal fees and you can claim them back"³.

The same ban covers checks on a guarantor. If a landlord or agent needs to check your guarantor's income and credit history, they cannot charge extra fees for that, for example for checks or a guarantor agreement⁴. And the check itself is a soft search, which does not affect your credit score².

What follows is what the rules allow, what a landlord's check actually looks at, what your rights are over your own credit file, and how to recover a fee that should never have been charged.

Landlords and letting agents cannot charge for credit or reference checks

The ban is not limited to a fee labelled "credit check". In England, you cannot be asked to pay for things like credit checks, references or inventories¹⁰. Agents cannot charge you for viewings, checks or tenancy agreements¹¹. In Wales, the prohibited list covers checking references or credit checks, administration, preparing a written occupation contract, renewing a contract, varying the contract term, replacing a joint contract-holder, viewing the property, preparing an inventory, arranging a guarantor, and checking the property at the end of the occupation contract¹². In Scotland, the same principle applies to credit checks for you or your guarantor³.

The rule sits inside a wider list of payments a landlord is allowed to ask for. Those are rent, a refundable tenancy deposit, a refundable holding deposit, a payment to change the tenancy, a payment when leaving without enough notice, a payment towards utility bills and communication services, a fee for late payment of rent, and a fee for replacing a key or security device¹³. Anything outside that list is a prohibited payment. A landlord is also not allowed to make you pay for a loan, pay for insurance or start a contract for a service as part of your tenancy¹³.

One narrow exception exists for tenancy changes. Where a tenant asks to change the tenancy, a fee above £50 can be charged, but the landlord should give evidence to a tenant that any fee charged above £50 is reasonable¹⁴. That is about changing an existing tenancy, not about checking a new applicant.

Checks on guarantors: the same ban applies

A guarantor is someone who agrees to pay your rent if you do not. Landlords and agents usually check a guarantor's income and credit history before accepting them⁴, and they usually check that the guarantor can afford to pay your rent¹¹. None of that work can be billed to you. Your landlord or agent cannot charge extra fees if you need a guarantor, for example for checks or a guarantor agreement⁴.

The check on a guarantor is a soft one. Where a lender runs a credit check on a guarantor for a guarantor loan, it does a soft credit check, which is not visible to other companies and will not affect the guarantor's credit score¹⁵. A guarantor may also have to pass a credit check and give information about their finances⁸.

If you are asked for a guarantor because of your credit history, that is a normal route rather than a penalty, and the cost of arranging it is not yours to carry.

Your permission is needed before a credit check

A landlord or letting agent can only run a credit check with your permission². They can only do a credit check if you agree¹, and they need your permission to check your credit history when you apply to rent⁷. Landlords can only access your credit file with your consent¹⁶. In Scotland, they can only check your credit rating if you give them written permission³.

Two things follow from that. First, if you have not agreed, the check should not happen. Second, permission and payment are separate questions: they need your permission and you cannot be charged for it¹¹. Agreeing to a check is not agreeing to a fee.

The check itself is limited. Landlords and agents can only do a soft search of your credit history if you say yes to this¹⁷. A soft search is not visible to other companies and does not affect your credit score¹⁵. It also does not tell landlords if you have missed rent payments, though some landlords might check landlord websites separately².

What a landlord's credit check looks at

Most landlords and letting agents will check to see what they think you can afford, by looking at your income and credit score¹. That means they check your income and what you spend to make sure you can afford the rent¹⁷. Many private landlords run credit checks on prospective contract-holders¹⁸. Landlords who do not use letting agents are less likely to carry out credit checks at all⁸.

Alongside the credit check, landlords or agents might ask for references from a current or previous landlord, or from your employer². Employers and letting agents may also check your credit report in some circumstances¹⁹.

What the check is not is a single national verdict. There is no such thing as a universal credit score; each lender has its own system²⁰. Creditors set a threshold level for credit scoring, and if your score is below the threshold they may decide not to lend to you or to charge you more if they do agree to lend²¹. Some landlords and rental companies do credit checks and may not rent to you if you have bad credit²². A bad credit rating can affect your ability to rent a home, get a mobile phone contract or anything else that requires a credit check²³.

Can a landlord refuse me because of my credit score?

Yes. A landlord or letting agent can decide not to rent to you on the strength of what the check shows, and there is no rule that obliges them to accept a particular score. Because each landlord applies its own threshold, the same file can pass with one and fail with another²¹.

If you are turned down, the practical question is what is on your file and whether it is accurate. A county court judgment can affect your credit score, your ability to borrow, your ability to rent, and your employment opportunities²⁴. Missed, late or partial payments are recorded on your credit file for at least six years⁶, and late payments, missed payments and defaults stay on your credit history for six years⁵. Some information, such as missed payments, defaults and court judgments, stays on your credit file for six years⁷.

Two things help before you apply. Being on the electoral register matters: lenders use it to check your name, address and where you have lived before, and not being registered could cause a delay or result in your application being turned down²⁵. Being on the electoral roll is one way your identity and home address can be confirmed, which could help to improve your credit score²⁶. Registering to vote with your local council is also suggested for current account applications, because some banks use it as part of their checks²⁷.

You can also check your own file first. Checking your own score does no harm: you can check it as often as you like without doing any harm⁹. Certain things will have a negative impact on your score regardless of the agency, for example not being on the electoral roll or making a late payment⁹.

If your credit history is the obstacle, there are routes that do not depend on it. A landlord or agent will probably still ask for rent in advance, so you need to budget for this²⁸. A guarantor is the other common route, and the checks on them are soft¹⁵.

Where an illegal fee has been taken: claiming it back

If you have paid a fee for a credit check, a reference check or a guarantor check, you can pursue it. In Scotland, illegal fees can be claimed back³. In Wales, if a landlord or agent is found guilty of an offence, they could face a fine and have to repay any banned fee to you²⁸.

The enforcement route runs through your local council. You can contact your local council, which can investigate prohibited payments and can help you get the money back, and it can also make your landlord pay a fine¹³.

Keep the paperwork. A record of what you paid, when, and what it was described as will support a complaint, and the same evidence discipline applies to deposit disputes generally: a landlord needs to show proof of the property's condition at the start and end of your tenancy if they want to keep money for damage or cleaning charges²⁹. Late fees for rent are a separate matter and could be taken from your deposit, or your landlord could go to court to get them back³⁰.

If a firm has charged you a fee in a credit broking context, the Financial Ombudsman Service handles complaints about being charged a fee for finding a loan, fees not refunded when no loan was taken out or offered, and being misled or not correctly informed about the loan's terms or cost³¹. That route is about credit broking rather than letting, but it shows the pattern: a fee taken without a service, or without the terms being explained, is a complaint the ombudsman recognises.