Tenant failed referencing? What agents and landlords should do next

It happens more often than you might think. An applicant seems perfectly decent - polite, well-presented, enthusiastic about the property - and then the reference comes back with issues. Maybe there's a CCJ from a few years ago, or their income doesn't quite meet the affordability threshold, or the previous landlord raises a concern about late payments.

What do you do? It's not always as black and white as 'pass' or 'fail', and the right answer depends on the specific circumstances. Here's how we'd suggest approaching it.

First: understand what actually flagged

Not all reference issues are equal. A bankruptcy order from last year is a very different proposition to a missed mobile phone payment from 2019. Before making a decision, read the full report carefully and understand the context.

At Vorensys, our reports are written in plain English specifically so that agents and landlords can understand the significance of each finding without needing a finance degree. If something's unclear, call us - our agents can walk you through the detail and help you understand what the risk actually looks like.

Option 1: ask for a guarantor

This is the most common solution when an applicant falls short on affordability or has a patchy credit history. A guarantor - typically a parent or close relative - agrees to cover the rent if the tenant can't pay. We reference guarantors to the same standard as tenants: credit check, income verification - the lot. The guarantor's income typically needs to be at least two and a half times the monthly rent on top of their own housing costs.

It's a fair solution that gives the landlord some protection while still giving the tenant a chance. We've written more about this in our separate article on guarantor referencing.

Option 2: request additional evidence

Sometimes a reference flags an issue that the applicant can explain. Maybe their income looks low on paper because they've recently changed jobs, but their new contract shows a higher salary. Or perhaps a CCJ has been satisfied but hasn't updated on their credit file yet (this happens more than you'd think).

In these cases, we can update the reference with additional documentation. We're not in the business of rubber-stamping borderline applicants, but if there's genuine evidence that changes the picture, we'll factor it in and update our recommendation.

Option 3: adjusted terms

Historically, some agents would ask for several months' rent in advance from tenants who didn't quite pass referencing. Under the Renters' Rights Act, this option is being significantly restricted - landlords will only be able to request one month's rent in advance. So while it's still technically available during the transition period, it's not a long-term solution.

What you can still do is discuss the situation openly with the landlord. Some landlords are willing to accept a tenant with minor reference issues if they understand exactly what the risks are. That's their call to make, and a clear, detailed reference report gives them the information they need to make it.

Option 4: decline the application

Sometimes the reference clearly indicates that the applicant is too high a risk. Significant rent arrears on a previous tenancy, active insolvency proceedings, or income that's well below the affordability threshold - these are situations where the kindest thing for everyone is to be upfront and explain that the application hasn't been successful.

One important note here: under the Renters' Rights Act, you cannot refuse a tenant simply because they receive benefits or have children. Decisions must be based on individual circumstances and evidence. A robust reference report gives you that evidence and protects you if a decision is ever challenged.

Having the conversation

Nobody enjoys telling an applicant they haven't passed referencing. Our advice is to be honest but sensitive. Explain what the reference found (without sharing the raw report, which contains personal data), outline any options available to them and point them towards resources that might help - for example, credit repair agencies if the issue is a poor credit history.

If you'd like to discuss a specific case, we're always available on 01630 318181. We deal with borderline references every day and can usually suggest the best way forward.