Finding a place to rent with a dishwasher, an elevator, and plenty of natural light is hard enough on its own. But that’s just the beginning. Now you have to run the gauntlet of the approval process—including the credit check. It’s pretty standard for rentals these days, but may still leave you wondering what, exactly, landlords are looking for.
Here’s what you need to know about credit checks: where they come from, what information they actually contain, and what landlords are looking for when they request them.
In This Article
What is a credit report?
A credit report is a document showing your financial history. It includes loans, eviction history, employment history, credit inquiries, and a list of your accounts. Some reports drill down even further into each account, noting if you made payments on time, and, if not, how late you paid. It will give the landlord a clear picture of your financial history—including debt and how regularly you paid your bills. It also includes your credit score.
Why is a credit check necessary?
Landlords use credit checks as a way to screen potential renters. Just like you need to make sure you’re getting a good place, they need to make sure they’re getting a good tenant. They don’t want to find out too late that their new renter has a long history of paying their bills 30 days late. Pulling a credit report is a safety net for the landlord.
Will all landlords request a credit check?
Landlords are not legally required to request a credit check, but the vast majority of them do. Typically, you’ll be asked to pay an application fee when you apply to a rental—money that’s often used to pay for a credit check and rental history report. If you’ve requested your own credit report in the past 30 days, a landlord may be willing to accept it and waive some or all of the fee. (In New York, landlords are actually required to do this.)
Where does the information on a credit report come from?
Every company that you have financial transactions with—think student loan companies, credit cards, auto loans, unpaid medical bills, and more—will report your account status monthly to the three main credit reporting agencies: Experian, TransUnion, and Equifax. They’re not required to report it, but the majority do. Then, public records are also pulled in. These come from places like courts, collection agencies, and government bodies.
Credit reports also include personal information, like your name, address, social security number, and employers. The three major agencies track how many times your credit report has been requested, as well—too many times isn’t a good thing. It can mean you’re struggling to get a credit card or loan of some sort and shows you might have trouble paying your bills.
What specific information are landlords looking for?
Landlords are mainly concerned with figuring out whether or not you’ll pay your rent on time and in full every month. That means they’re looking for late payments, high amounts of debt, length of credit history, and any bankruptcies or collection accounts.
Overall credit score
The top of your credit report will include your credit score. It is a numerical summary of the rest of the report. Higher credit scores generally mean that there's less risk for the landlord. You can expect a landlord to have a minimum credit score requirement that they typically will not budge on. In some cases, however, if your score is just below their threshold they may make a decision after reviewing the rest of your report.
Landlords are also on the lookout for late payments. They’ll be much more concerned with any that happened in the last year or two—if you have some three-year-old late payments, but have recently been on time with everything, then you’re much more likely to get approved.
The amount of debt a prospective tenant carries can provide insights into their financial stability. Landlords consider the total amount of debt, including credit cards, loans, and other outstanding balances. If an individual's debt load appears excessive compared to their income, it may raise concerns about their ability to afford rent payments.
Landlords look for any public records listed on the credit report, such as bankruptcies, tax liens, or judgments. These records may indicate financial struggles or legal issues that could impact the tenant's ability to meet their rental obligations.
Length of credit history
The length of time a tenant has had credit accounts is also relevant. Landlords may prefer tenants with a longer credit history as it provides a more extensive record of financial behavior. Limited credit history or a recently established credit profile may make it harder for landlords to assess the tenant's financial responsibility.
Inquiries and new accounts: Landlords take note of recent credit inquiries and new credit accounts. Multiple recent inquiries or a sudden increase in credit accounts could suggest financial instability or a significant change in the tenant's financial situation.
Landlords pay attention to any records of past accounts in collections. These negative marks on the credit report raise concerns about the tenant's ability to fulfill their rental obligations and may impact their application.
An eviction will only show up on your credit report if your unpaid balance was sent to collections in addition to the eviction proceedings in housing court.
Preparing for a credit review
Can I check my credit in advance?
Yes! It’s probably a good idea to review your own credit report before you start apartment hunting. You’re allowed a free report from each major agency every year, so it won’t cost you anything. That said, don’t check it obsessively—credit reporting agencies keep track of how often your credit report has been requested, and too many times can be a red flag.
What can I do if there’s something negative on my credit report?
Bad credit doesn’t necessarily mean you’re going to get rejected for your dream apartment. If you know something negative will show up, let the landlord know before they pull your credit. Explain to them why it happened, and why it won’t be a problem in the future. Although it’s not a guarantee, this may be enough to reassure a landlord that you’ll be a good tenant.
If something shows up on your credit report that you know is absolutely incorrect, you can file a dispute with the credit bureau. You may need to print out a record showing you’ve disputed it and include it with your application, though—the process to get errors fixed or removed can take a while.
How can I tell if I was rejected because of something on my credit report?
As part of the Fair Credit Reporting Act, landlords are required to tell you if they’ve rejected your rental application because of something in your credit report. This is formally known as an “adverse action notice.” This notice doesn’t have to explain what exact information made them reject you—often, they include vague language like “you were denied due to something discovered through a consumer report agency”—but the notice does have to mention which agency supplied the report the landlord used.
The information provided on this website does not, and is not intended to, constitute legal advice.