Will My Landlord Run a Rental Credit Check?

Few people realize that landlords run credit checks. Landlords, like many other businesses, run credit checks on potential tenants to judge the likelihood that the tenant will default on rent payments. A tenant with a large number of unpaid bills is considered more likely to fall behind on rent than tenants with spotless payment histories.

Landlords are less likely to rent to those that have negative payment history on their credit report, such as:

• past due accounts
• debt collections
• charge-offs
• tax liens
• judgments
• foreclosure
• eviction
• repossession
• garnishment
• bankruptcy

You’re more likely to have your rental application denied if your credit report contains a foreclosure, repossession, garnishment, or bankruptcy within the past two years. Several charge-offs, collections, and late payments within the past two years will either result in your application being denied or you may be approved with a higher security deposit.

How landlords pull your credit report

Landlords may have different methods of doing a tenant check. Some landlords manually pull your credit report and review it. When a landlord pulls your credit report manually, it’s typically the same credit report as your personal credit reports available from Equifax, Experian, and TransUnion.

There is some proprietary software available that specifically offers credit check tenant reports for landlords. Landlords can use this to automatically do a credit check on a potential tenant. This software also uses the information in your personal credit reports to make an automatic decision to rent, rent under certain conditions, or decline your rental application. If your application is declined, the landlord can view the specific reasons that the software made the decision. They’re required by law to let you know these reasons.

Your rights under the Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA), a federal law regulating credit reporting, also gives you the right to request, within 60 days, a copy of the credit report that was made in the decision. If the information on your credit report is inaccurate, you can submit a credit report dispute to have it removed.

Whether the landlord pulls tenant credit reports or uses third-party software to do it, the FCRA requires them to get your permission first. You’ll usually sign a consent form allowing your credit report to be pulled. The consent form may be a clause at the end of your rental application or it may an entirely separate document.

Landlords sometimes check your credit score

When running a credit check landlords may also pull your credit score to make a faster rental decision. They may pull your FICO score, your credit score from credit bureaus, or even have their own credit scoring system. It’s a good idea to check both your credit report and credit score before putting in a rental application. That way there are no surprises when you receive the results.