Landlord Credit Check: What to Expect

Your credit history could make a big difference in your next apartment search. Landlords and property managers typically run a rental credit check on potential applicants to minimize their risk and avoid leasing to someone who might struggle to pay.

Here's what landlords are looking for when they check your credit.

What landlords look for in a credit check

For would-be renters, the credit-check process may seem mysterious, but the information landlords are looking for is mostly found in your credit reports:

• Payment history: Landlords want to see that you have a strong record of making payments on time. Late or missed payments might be seen as a red flag and a sign you might not pay your rent in the future. 

• Debt level: Landlords want to make sure you can afford your monthly payments, but if you already have too many debt payments, that might be a challenge. 

• Employment history: Landlords want to make sure you have a steady, reliable income to meet your monthly rental payments. That consistent source of income is a good sign to landlords. 

• Public records: If you have an account in collections, bankruptcy or eviction on record, landlords will likely factor that into their rental decision. 

• Bank statements: Landlords might request recent copies of bank statements to verify your income and your identity. 

• Background check: Landlords want to protect the safety of other tenants, which means they want to know about any criminal history ahead of time. Background checks also help them verify your identity. 

Some credit checks also include your actual credit score. A good or excellent credit score shows landlords that you have a strong history of paying your bills, credit cards and loans. In a competitive rental market, sometimes a higher score can make the difference between you and another applicant.

Get your credit ready for a rental application

There are three things you can do to set yourself up for success before applying for an apartment — and they’re free.

Know what's in your credit reports — and be ready to explain it

If you're worried about what a potential landlord or property manager might find on your credit report, there's a simple fix: Look first. You're entitled to a free copy of your 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't control how your credit report might be interpreted, but if you already know what's in it, you'll be more prepared to answer questions and provide context, if needed.

And, if you’re worried about a past financial mistake in your credit report, you can be proactive and write a statement to share with potential landlords that explains what happened — and why it won’t happen again.

Dispute credit report errors before you apply

Use this time to spot inaccurate information and dispute errors with the credit bureaus. Look for an account or name that isn’t yours, a payment marked as missed but that you actually made or inaccurate loan balances or credit limits. Getting these errors fixed before applying for an apartment can increase your chances of being approved.

Minimize credit score impact when apartment shopping

When it comes to being approved for a rental, your credit score is likely a huge factor. That’s why it’s important to protect your credit when you can. While many rental applications appear on your credit reports as a soft inquiry, some tenant screenings can sometimes result in a hard inquiry, which temporarily dings your credit score. You might be able to avoid a hard inquiry by asking your landlord upfront how they plan to screen you and offer to provide a credit report yourself.

Applying to several rentals within a short timeframe can minimize the impact on your credit score. Some credit scoring models recognize this as “rate shopping” and combine similar inquiries made close together into a single entry.

How landlords and property managers check credit

A credit check can mean a lot of different things, and credit score requirements can vary among apartments. It's sometimes possible to rent with no credit history at all.

Landlords might simply verify your identity and check your credit score. Others may opt to run background and credit checks, or look at social media, county records and bank statements.

Tips for renting with limited or bad credit

If you have struggled to build strong credit or are just starting out, it can be hard to qualify for an apartment. Here are some options that may increase your odds:

• Find a trusted 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, which makes it a 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.

• Use savings to pay for several months of rent upfront. This might convince the landlord or property manager that you are serious about your commitment.

• Provide a written explanation for any negative marks on your credit reports. A landlord may overlook a single mistake that can be explained, such as a late payment due to job loss or high debt due to a medical emergency.

• Reassess your budget. Looking for an apartment in a lower price range or with fewer amenities might expand your housing options and increase your chances of passing a rental credit check. Finding ways to lower your bills could help you keep up with payments, which can help build your credit.

Once you've been approved, use this as a chance to start building credit. Consider getting your rent payments reported to the credit bureaus to build a record of on-time payments that will improve your credit.

Tips to avoid rental credit check problems

Tenant screening services can — and do — make mistakes. While some mistakes are out of your control, there are steps you can take to try to get the best outcome:

Before you apply: If you’ve been evicted, check housing court records to ensure that the outcome of the case is correct (if not, contact the court to get information corrected). Do this in addition to checking your credit reports and fixing any errors.

During the application process: The CFPB recommends you give your full first, middle and last name and date of birth to make sure the screening company gets information on the right person.