What Landlords Really Look For in a Credit Check

Landlords want to make sure you're current on accounts or can explain any lapses.

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Because many landlords check applicants' credit, your credit history could make a big difference in your next apartment search.

For would-be renters, the credit-check process may seem mysterious. If you're wondering what landlords scrutinize when they check your credit, here's an insider's look, along with strategies for landing a place to live.

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How landlords and property managers check credit

A credit check can mean a lot of different things. It ranges from finding out whether a tenant meets a landlord's internal criteria to poring over pages of account histories.

Janet Akin, a property manager in San Jose, California, said she uses a tenant screening service called e-renter.com to screen applicants for her clients who want to rent their properties.

“As a property manager, you have a fiduciary duty to your clients,” Akin said. “You have to go through the data and pull as much as you can.”

Akin described running background and credit checks on potential tenants, looking at credit scores as well as social media, county records and bank statements, among other things, to check for consistency.

Here are a few other ways landlords and property managers may check credit:

Landlord associations

Organizations such as the National Association of Independent Landlords offer tenant credit reports to landlords for a fee. Depending on the association, these checks may count as hard inquiries and cause credit scores to dip temporarily.

Tenant screening services

Some tenant screening services offer credit reports to landlords, others don’t. On e-renter.com, for example, landlords request a certain credit score range, and the site tells them whether the tenant meets or exceeds that requirement. It may also include evictions, bankruptcies, collections and other background information.

Credit bureaus

Equifax, Experian and TransUnion offer several credit screening products for the rental market. These services may require an applicant to initiate the check, and generally count it as a soft inquiry, which doesn't affect a credit score.

  • Experian says rental applicants can pay $14.95 to buy a copy of their Experian credit report online and choose to grant one or more prospective landlords access to view their credit report for up to 30 days. “The consumer’s personal information, including Social Security number and account numbers are not shared with prospective landlord(s). When a consumer purchases their Experian credit report, it is considered a soft inquiry and there is no impact to their credit scores,” says Greg Wright, executive vice president and chief product officer at Experian Consumer Information Services.

  • TransUnion offers a similar service where landlords can pay to view the prospective tenant’s credit report or pass on the cost to applicants. The applicant has to allow access, which counts as a soft credit pull.

  • Equifax also offers a tenant screening check that is a soft credit pull, to avoid damage to applicants' scores.

Not all landlords and property managers do credit checks online. Some may request a copy of an applicant's credit report or ask about credit in person. You are entitled to at least one free credit report from each of the three major credit bureaus every 12 months. Request them by using AnnualCreditReport.com, then download and make copies of your reports, just in case it comes up.

Credit-related deal breakers for renters

Landlords or property managers generally aren't looking for immaculate credit, but certain negatives may make them more likely to reject an applicant.

Unless there's a good explanation, a landlord probably won't approve someone who's had cars repossessed or credit cards charged off, says Sherry Tetreault, credit and housing counselor at Money Management International in Clarksville, Tennessee.

“Landlords seem to be most concerned with the here and now — within the last 24 months. Most feel that if a person has been able to keep their lines of credit paid on-time over that time frame, they will be a pretty good tenant," she said via email. "And of course, money talks. If a client is able to pay a larger deposit than is required, many landlords will agree to lease a home/apartment to the client.”

To be sure, good credit doesn't ensure approval. Factors such as income, criminal convictions and past evictions can also play a big part in the approval process. Talk to the landlord to get a better idea of what they are looking for before applying.

How to rent with no credit

If you don’t have credit, find a family member or friend with good credit who’s willing to co-sign a lease for you. By co-signing, they are promising to pay the rent if you don’t. That’s a much less risky deal for the property manager or landlord. After a certain number of on-time payments, your landlord or property manager may agree to take your co-signer off the lease.

Or, if you have a lot of savings, you could offer to pay several months of rent upfront to lock down a deal. (Read more tips on how to rent an apartment with no credit.)

Once you find a place, start building credit by applying for a secured credit card or getting your rent payments reported to the credit bureaus.

How to rent with fair or bad credit

Renting with blemished credit can be more challenging, but it’s not impossible. A lot depends on the reasons your credit is low. A landlord may overlook isolated credit missteps that can be explained, such as those due to job loss.

Even with poor credit, you may still be able to get an apartment with a co-signer, a larger security deposit or advance rent payments. Sometimes, looking for an apartment in a lower price range can make it easier to find an offer with more flexibility.

If your score is low because you consistently lean on credit too much or you're bad with due dates, consider trimming your expenses and working toward on-time payments. As you keep up with payments, you'll likely improve your credit, too.

Know your credit

If you're worried about what a potential landlord or property manager might find on your credit report, here's a simple fix: Look first. You're entitled to a free annual credit report from each of the three major credit bureaus. Those will include all the credit information the landlord will see, sometimes more. You can also check your TransUnion credit report summary on NerdWallet, which updates weekly, as often as you like.

You can't control how a landlord or property manager might interpret a credit report, but if you already know what's on it, you'll be more prepared to answer questions and provide context, if you need to — and getting an apartment may become a bit easier.

See how your score may change

Use NerdWallet's simulator to learn how money moves could affect your credit. Get a free score, too.

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