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What Do Landlords Look for in a Credit Report?

Virtually every rental you apply for will want to do a credit check. They’re looking for any financial red flags: evictions, bankruptcies, and late payments.

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.

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.

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 past evictions, late payments, and any bankruptcies or collection accounts.

A history of evictions will be the biggest red flag for a potential landlord. An eviction filing could show up on your credit report, even if your landlord wrongfully tried to evict and you ended up winning the case or settling out of court. If you’ve got a good explanation for your eviction history, make sure to have proof handy—a letter from your past landlord saying that you’ve reconciled, for instance, or a note from the court.

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.

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.)

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.