Landlords and credit checks: What you should know

1

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired.

Whether you’re applying for one of the best credit cards or you’re looking for a new apartment or home to rent, credit checks are bound to happen.

Landlords and property owners want to vet the people they’re renting property to so their assets and finances are protected. You may be wondering how a landlord credit check works and what type of information landlords see when they’re looking at a renter’s credit history. Prepare by knowing the details of a credit check by landlords.

What do landlords look for in a credit check?

Landlords use a credit check for tenants to make sure the person they’re considering renting to has a solid financial history and is considered trustworthy. In a credit check, a landlord is looking for a good credit history and on-time payments. They’re also looking to see if a potential tenant has been previously evicted or has declared bankruptcy, which may influence their decision to rent.

What can a landlord see in a rental credit check?

The information depends on the type of rental credit check that is accessed, but the following may be shown in a tenant credit check.

  • Credit inquiries and history
  • Mortgage payment histories
  • Public record filings, like bankruptcies, tax liens and eviction reports
  • Income information
  • Social Security number
  • Aliases
  • Current and previous employers and addresses

Is a rental credit check a hard or soft inquiry?

In many cases, a rental credit check is a hard inquiry. Hard credit inquiries require your permission. They can also lower your credit score by several points because they’re calculated as part of the “new credit” part of your credit score, but it’s easy to bring this part of your score back up as time passes.

Some landlords may do soft inquiries into your credit, which will not affect your score. These can be done with third-party services or by asking you to provide your credit report by accessing a free service.

Can I rent if I have bad credit or no credit history?

There may be landlords who don’t do credit checks. While large property management companies typically require a credit check, renting from a landlord with a smaller portfolio could be an option.

Some landlords will rent to those with poor credit but will require an increased upfront payment, like a bigger security deposit.

There may also be bad-credit apartments and apartments specifically available to those with low income. Apartments based on income are targeted to those who need affordable housing but who may not meet the credit and income requirements of other landlords.

You may also look into co-signer options. That can give a landlord confidence in renting to you since the co-signer will have to meet the landlord’s credit requirements and will be on the hook for payments and rental terms.

What credit score is needed to rent an apartment?

You may be wondering what kind of credit score you need to rent an apartment. For instance, can you get an apartment with a 500 credit score?

Each landlord will have different requirements, so it helps to know what’s considered a “fair,” “poor” or “very poor” credit score. The fair FICO score is 580 to 669, while the fair VantageScore is 601 to 660. Anything below those is considered poor or very poor.

If your score is poor or very poor, you may encounter rental challenges. You may want to get prepared with other options, like using a co-signer or looking for based-on-income apartments.

How to pass a rental credit check

To pass a rental credit check, you’ll want your credit score to be as high as it can be. Improve your score by making on-time credit card payments, lowering your credit utilization and not opening or closing accounts to maintain your credit history and lower your credit inquiries.

Credit scores and the pandemic

According to recent data from FICO, the average U.S. credit score continues to sit above 700, indicating that the widespread economic uncertainty following the coronavirus pandemic has not yet caused widespread decline in creditworthiness. But since credit scores track past credit use, it generally takes some time for events like this to show up on credit reports.

If you’re struggling to pay bills, contact your creditors and lenders and explain your situation before your credit score takes a hit. Many auto lenders and credit card companies have hardship programs in place for customers impacted by the coronavirus. These programs can lower your monthly payments or potentially suspend payments temporarily. While you’ll still need to pay back your debt, this will protect your credit, assuming you follow the terms and conditions set by your lender.

What to do if you have a low credit score

If you have a low credit score, present the landlord with information showing you’re a trustworthy tenant. This can include detailed employment history and proof of income, an offer to talk with your current landlord and references or statements of past on-time rental payments.

You can also ask to use a co-signer, which guarantees the landlord will be paid for rent if you’re unable to make payments. You may also offer advanced payments and a larger security deposit to show you’re serious.

What else do landlords look at?

Background check

Landlords might run a background check to look at criminal convictions and lawsuits. You’ll have to permit a landlord before the landlord runs a background check on you.

Income

Some credit screening reports will include income information. When this isn’t available, a landlord may ask you for several months of recent pay stubs to make sure you have steady finances.

Listed references

A landlord may ask for references, like people who have rented to you in the past, to explore your tenant candidacy.