The number of renters rose to its highest rate in 50 years in 2016, studies say, and rental growth in the U.S. hasn’t slowed since then. In 22 major U.S. cities, the number of renters eclipses the number of homeowners. In spite of rising rent prices, 84 percent of millennials say renting is cheaper than buying a home.

The growth in apartment rentals may leave you wondering, “Do apartment credit checks hurt your credit score?” It’s commonly accepted that when you buy a house, your credit score may drop a few points during the mortgage application process. But is the same true for renting an apartment?

In most high-rise apartment buildings, as well as smaller apartments owned by investors, a credit check is a standard step in renting an apartment. Even homeowners who opt to rent a portion of their house, such as a second floor or a basement, may use any number of websites or services to quickly and cheaply do a credit check and background check on prospective tenants.

The difference between hard and soft credit inquiries

It’s important to understand the difference between a hard credit inquiry, which occurs when you apply for a mortgage or other loans or lines of credit, and a soft credit inquiry.

A hard credit inquiry is when a lender or potential landlord pulls your credit reports and checks your credit score with your permission. Hard credit pulls take place when you apply for a credit card, personal loan, vehicle loan or lease or a mortgage. Landlords may also do a hard credit inquiry.

In most cases, a hard credit inquiry usually reduces your credit score by less than five points. But according to FICO, if you have a short credit history or few accounts it could hurt more. Although inquiries stay on your credit report for up to two years, they only affect your credit score for 12 months.

Of the five factors that make up your credit score, hard credit inquiries make up about 10 percent of your credit score and are calculated as part of the “new credit” portion of your score.

While a hard credit inquiry always requires your permission, soft credit pulls may take place quite often without your knowledge. For example, if you receive an offer for a pre-approved credit card in the mail, the provider most likely did a soft credit pull to determine if you qualified. If you check your own credit, either through or through another credit service, that is also a soft credit pull. And when credit card providers and banks make your credit score accessible for free, they also perform a soft credit pull to get that information.

How apartment rentals check your credit

Landlords can check credit in several different ways; some are considered hard pulls while others are considered soft pulls. You can always ask the landlord what type of credit check they’re going to do. If you want to make sure the landlord isn’t doing a hard credit check, you can offer to provide your own credit report, which results in a soft pull.

Many tenant screening reports are different than the credit checks a loan company or credit card provider may perform. These reports may be more in-depth than other credit reports, offering criminal searches, eviction reports, and income information. TransUnion, Equifax, and Experian, the three major U.S. credit bureaus, all offer specialized screening reports for landlords, Realtors®, and property managers. While Experian states its service is only a soft credit check, the other two bureaus don’t specify.

Landlords may also obtain credit reports from third party services, who then pull reports from the credit bureaus. Whether these reports represent a soft or a hard inquiry depends on the service used.

How multiple credit checks for rentals affect your credit score

If you’re looking at a number of apartments to find one that meets your needs and your budget, several landlords may pull your credit report or check your credit score. But this isn’t as damaging to your credit report as it might sound.

According to FICO, its scoring model allows for “rate-shopping” for consumers applying for a loan or, in this case, apartment-hunting for people seeking a place to live. FICO ignores inquiries made within 30 days of your apartment application. So, as long as your apartment hunt doesn’t drag on for too long, your score won’t be hurt by multiple credit inquiries.

The VantageScore credit scoring model only permits 14 days of rate shopping, but considers all inquiries made within that time as a single inquiry, regardless of the type of credit application. So, if you are trying to get a mortgage, can’t find a suitable rate, and decide to rent instead, the hard pulls from your mortgage applications and tenant applications will all count as a single inquiry.

Rental denials do not show up on your credit report. If a landlord denies housing to a tenant or charges higher rent due to information in their credit report, the landlord must disclose how they obtained that information. The prospective tenant is then entitled to a free credit report.

The bottom line

Overall, credit checks are a fact of life, whether you are renting an apartment, buying a home, or applying for a loan. Being aware of the effects of hard credit inquiries on your credit score can help you manage your credit by clustering similar inquiries together.