Can Landlords Really Check Your Credit?

Discover how Property Owners Screen Housing Applicants

Can Landlords Really Check Your Credit?
April 18, 2017

Besides determining whether you can get a loan, your credit also reaches into several other areas of your life, including the ability to lease a new home. You may be looking for a fresh start and a new place to live, but landlords often dig into your past by reviewing your credit and other background reports. When there are multiple applicants competing for the same home, the renter with a better history will win out. But there are ways to overcome low credit scores and get the living situation you want.

Landlords can and do check your credit. Technically, they have the right to do so as soon as you submit a rental application. However, most landlords and rental agencies get written permission from prospective renters during the application process. Logistically, the renter might order the report, pay the fee, and authorize the landlord to view the report.

What they see: By reading your credit reports, landlords can see your existing loans, loans that you've used in the past, and any judgments or public records that appear in credit reports (such as a recent bankruptcy or foreclosure). They can also see details like your minimum required payments, and if you've made late payments.

Credit scores: Credit scores are also part of the deal, and some landlords set a minimum threshold score to approve applications. However, credit scores cost extra. Ernie Rafailides, who runs the property management firm Bayview Management, LLC, in Towson, MD, says that his team can find all the information they need in a credit report (and a numeric score doesn't add additional value). You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.

Tenant Credit Screening Services

The term "credit" means different things to different people. You have dozens of credit scores, including some that lenders design for their own needs. When renting, it might be better to think of specialty consumer reporting agencies instead of general credit.

Landlords certainly look at your traditional credit information from the major credit bureaus, but they have additional products available – similar to credit reports – that they use to evaluate your application. Fortunately, those consumer reports are subject to many of the same consumer protection laws, so you have the right to review those reports and fix errors.

Tenant screening services are a broad category of services designed to help landlords check you out. In addition to standard credit reports and scores, they typically include:

  • Criminal background checks
  • Eviction reports from public records
  • Current and previous addresses
  • Information about current and previous employers (if available)
  • Information provided by previous landlords (if any)

These services are available from numerous providers, including major credit bureaus like Experian and TransUnion.

What Landlords Look For

Landlords aren't just nosy – they're concerned about renters who pay late, damage property, or cause problems with neighbors. They might not be as concerned with your credit as you think. After all, if they only rent to people with great credit, they'll run out of renters quickly.

Brian Davis, a real estate investor with 15 rental properties and co-creator of property owner educational site, starts with eviction history and then moves on to criminal background checks. "Credit history is more nuanced, which is why I look at these other factors first," says Davis.

Eviction, foreclosure, and collection accounts for utilities. Landlords are sensitive to housing-related issues for obvious reasons. Plus, housing expenses are often the payments people prioritize (to avoid getting evicted). If things have gone that badly for you, some may believe – possibly unfairly – that history will repeat itself. Recent evictions are a bigger deal than events that took place six years ago.

Criminal history: Landlords want to minimize problems at their properties, so the nature of a conviction is critical. The goal is to avoid theft, altercations among neighbors, and damage from a police raid. For Davis, a minor drug possession charge won't necessarily disqualify an applicant, but trafficking charges, violent crimes, and fraud are problematic.

What about your credit? Some landlords make decisions by diving deep into your credit, while others draw the line at a certain credit score. A few late payments in the past probably won't tank your application. Even a rough patch from which you've recovered isn't a big deal. However, a widespread pattern of ongoing late payments does not look good.

It's also worth paying attention to the monthly payments on your debt. When your minimum payments (which landlords can see on your credit reports) eat up most of your income, landlords will wonder if there's anything left for rent. If you want to reduce your interest payments and lower your debt, try the free Debt Optimizer by MoneyTips.

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Brittany | 04.18.17 @ 18:17
I've been denied for an apartment because my credit isn't the best, it really bites not having the best credit, but i am working on it.
Chrisitna | 04.19.17 @ 14:30
I can understand why landlords would want information about eviction history, criminal history, or non payment to utilities, but limiting the renter pool to those with a specific credit score or above is discouraging. There are often extenuating circumstances, and as long as the rent is paid, the credit score issues should be negotiable.
$commenter.renderDisplayableName() | 12.01.20 @ 17:40