A credit check and tenant reference starts to build a picture of the person who wants to become your tenant, giving you information that will help you to make a more informed decision about whether they are the right person to become your tenant, rather than just relying on your instincts after meeting them only once or twice.
You may also find that the terms of your landlord insurance insist of tenants being referenced for cover to be valid. This is not something you want to be arguing about with your insurance company when you're trying to make a claim! Can you imagine how you'd feel with a £ 10000 repair bill for a leak because your insurance wouldn't pay out over a technicality like you not having a professional reference carried out on your tenant prior to letting them move in?
Credit checks and reference checks of course only tell half the story. They don't tell you anything about the subject's behaviour as a tenant, which is quite important! Put bluntly it is quite possible for someone to pass all these checks and still be a complete rotter! How you may ask? Well, for the sake of ease most landlords evict on a mandatory 'non fault' Section 21 notice which does not get a CCJ (County Court Judgement) awarded against the tenant, so he can move from property to property and serial offend whilst maintaining a clean official record.
In summary, these checks allow you to: