What to Do If You Fail Tenant Referencing

Why you might have failed referencing

Credit check failure is the most common reason. Your credit report may show County Court Judgements from the last six years, defaults on credit agreements, an IVA or bankruptcy, multiple missed payments, very thin or non-existent credit history, or high levels of existing debt.

Affordability failure happens when your annual income falls below the typical threshold of 2.5 times the annual rent. If you earn £30,000 and the rent is £1,200 per month, you'd pass — just. But at £1,300 per month, you might not.

Employment verification failure occurs when your employer doesn't respond, your employment dates don't match what you stated, or you're on a probationary or temporary contract. Self-employed applicants often face additional scrutiny.

Landlord reference failure can happen when your previous landlord doesn't respond (the most common issue), gives a negative reference, or reports late rent payments or property damage.

Referencing companies are legally required to tell you if your application was declined based on information from a credit reference agency, and which agency they used. You then have the right to see that information. Ask for this — it tells you exactly what to fix.

What happens to your holding deposit?

Under the Tenant Fees Act 2019, a landlord or agent in England can charge a holding deposit of up to one week's rent. The rules around returning it are clear.

You should get it back if the landlord decides not to proceed for any reason including failed referencing, or if the landlord doesn't enter into a tenancy agreement within the deadline for agreement, which is usually 15 days unless you agree a different period in writing.

The landlord can keep it if you provided false or misleading information that reasonably affected their decision, if you failed a Right to Rent check, or if you withdrew from the tenancy or failed to take reasonable steps to enter the agreement.

The holding deposit must be returned within seven days of the decision not to proceed. If a landlord or agent won't return your holding deposit and you believe you're entitled to it, contact your local council's Trading Standards team. Citizens Advice can also help you understand your options, and you can take the case to small claims court if necessary.

Can you still rent the property?

Yes — in many cases. A not acceptable referencing result is a recommendation, not a legal prohibition. The landlord makes the final decision and has several options.

They may accept with a guarantor, which is the most common outcome. The landlord agrees to let to you if you can provide a UK-based guarantor who passes their own referencing checks. The guarantor agrees to cover your rent if you can't pay. They typically need to earn at least 2.5 times the annual rent.

They may accept with rent in advance. Some landlords will accept three to six months' rent paid upfront instead of or alongside a guarantor. Unlike deposits, advance rent payments are not capped by the Tenant Fees Act.

They may accept with conditions such as a shorter initial tenancy, a break clause, or more frequent inspections. These protect the landlord while giving you a chance to prove yourself.

Or they may reject the application, in which case you're entitled to your holding deposit back within seven days and a clear explanation of why.

If you've been told you've failed referencing but want the property, don't wait passively. Contact the landlord or agent directly, explain your situation, and offer solutions. Proactive tenants who present solutions are far more likely to succeed.

Steps to take right now

Find out exactly why you failed. Ask the letting agent or referencing company for the specific reason. If it was a credit check, ask which credit reference agency was used and request your statutory credit report from that agency — it's free.

Check your full credit report using a service like Checkmyfile to see all three agencies at once. Look for errors, outdated information, or issues you didn't know about. Sometimes a forgotten mobile phone contract or an address you no longer live at causes problems.

Dispute any errors. If you find incorrect information on your credit report, raise a dispute directly with the credit reference agency. They have 28 days to investigate. If the error caused your referencing failure, you may be able to get the referencing re-run.

Register on the electoral roll if you haven't already — it's the single quickest way to improve your credit standing. Register at gov.uk/register-to-vote.

Gather supporting evidence. Bank statements showing rent payments, employment contracts, payslips, and professional references all demonstrate that you're a reliable tenant despite what the credit check says. For your next application, having this documentation ready will strengthen your position.

Building your credit score for next time

If your referencing failure was credit-related, the most important thing you can do is start building positive credit history now so the next application goes differently.

Sign up for a credit builder. Wollit reports positive payment history to all three UK credit reference agencies for £9.99 per month, with no credit check to sign up. Each on-time payment adds positive data to your credit report.

Pay down existing debt, focusing on reducing credit card utilisation to below 30% of your limit. Report your rent payments if you're currently renting, using a service that adds rent payments to your credit file. Don't apply for new credit — every hard search stays on your file for 12 months, so wait until your report has improved.

The combination of these steps, maintained consistently, builds a stronger credit profile over time. How quickly that translates to a better referencing result depends on your individual circumstances.

Making your next application stronger

Whether or not this particular tenancy works out, here's how to set yourself up for success next time. Consider targeting private landlords who are more flexible with credit issues. Letting agents follow strict processes; private landlords make personal judgements.

Prepare a guarantor in advance if you have someone willing and eligible. Having a guarantor ready to go speeds up the process and shows the landlord you've anticipated their concerns.

Build a comprehensive application pack with employment references, bank statements, payslips, and any evidence of previous rent payments. The more evidence of reliability you can provide alongside your application, the better.

Don't be discouraged. Failed referencing is not recorded on your credit file or any central register. Each landlord and referencing company runs their own checks independently. A failure with one property has no bearing on the next. A failure with one property has no bearing on the next, and many tenants who fail referencing once go on to find a suitable property.

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