What do apartments look for in credit checks

Tenant credit checks are different from traditional lending credit checks that measure your creditworthiness—or how risky of a borrower you are. Landlords focus more on your actual credit information rather than deciding rental agreements based on your credit score alone.

However, you shouldn't focus on a specific credit score number. The cutoff can vary depending on the apartment, your local rental market, your income, and the rent.

As a reminder, your FICO Score does not consider your income in its calculation, so that's something the landlord will factor into their decision separately.

A credit score below doesn't automatically mean your application will be denied, but a landlord may take a closer look at your credit details if your score is in the mids and below. In a competitive rental market, the higher your credit score, the better. Landlords look at more than just your credit score to evaluate your rental application—that's if they factor in your credit score at all. Some landlords only look at your actual credit data, focusing on your payment history instead.

Regardless of your credit history, landlords consider the ratio of your monthly income to monthly rent to ensure you can afford the rent payments. Some landlords use tenant screening services or rental-specific credit scores to approve applicants. Landlords may even opt for a service that automatically screens tenants based on certain risk factors like debt-to-income ratio, number of bankruptcies or delinquent accounts, and criminal history.

Your credit score is a number between and This number is indicative of your financial history with credit, which can include debt amounts, the length of your credit history, types of credit, and amounts of new credit. Your score is usually accessible for a small fee when you order your free annual credit report. For more regular credit monitoring, there are services like FreeScoresUSA and CreditScorePro that you can subscribe to for a fee for credit score updates.

This is because your credit report and your credit score tell a potential landlord how reliable you will be as an apartment renter when paying your bills every month.

Some of the things landlords look for in a credit check include your credit score, whether you pay your bills on time, your rental history, and whether you have any debt and how much debt compared to your income.

Because your credit score is based on a number of factors, and your credit report is a cumulative documentation of your financial history, there are a lot of things you can do to get a better credit score. For more help managing your finances as a renter, visit the ApartmentSearch. Need additional help or have questions, don't hesitate to contact us! We'll occasionally email you properties matching your search criteria and will never share your email without your consent.

Toggle navigation MENU. Sign In Register. Moving Resources. Renting Apartments and Credit: A Guide to Credit Scores and Reports Whether you are renting an apartment for the first time or are a seasoned renter, you know that the state of your credit score plays a major role in the leasing approval process. What is a credit report? Where can I get my credit report? What is my credit score? Why do apartments check your credit? What do they look for? How can I improve my credit score? Start by keeping up with your credit score when you order your credit reports.

You can order all three free reports at once and then subscribe to a monitoring service for a fee to get updates. If you do this it will be easier to check for inconsistencies. You can also consider spacing out your free annual reports over the course of the year so you can keep tabs on your credit without charge. If you know in advance that you will have to miss a payment, contact the lender and see if you can set up a payment plan.

You should also limit your use of multiple cards. Instead, only use them every few months and pay off the balance immediately. Your credit looks better if you have a lot of credit but have only used a little.

Last, be prudent about opening new cards. It is best to limit hard inquiries if your credit is already unstable. Return to Resources. Apartment Rental Application Process. Apartment Safety and Security. Apartment Safety Tips for Summer Vacations.

Earthquake Safety Tips for Apartment Renters. Features of Disability Accessible Apartments. How to Find a Handicap-Accessible Apartment. Tips for Apartment Emergency Preparedness. Advice for Moving to Sacramento, California.

Albuquerque, NM Moving Guide. Baton Rouge Moving Guide. Best of Austin, Texas City Guide. Birmingham, AL Moving Guide. Charlotte, NC Moving Guide. This is an important aspect of predicting whether or not a rental applicant will be a responsible tenant. As you assess the results of a credit check, landlords should watch for:. What credit score does the average landlord look for? ResidentScore also scores more applicants who may not have much credit history to evaluate.

While traditional credit checks are typically more limited, ResidentScore can be used to score all applicants with at least one account on their credit report. Unlike a typical credit score, ResidentScore was built specifically to identify the likelihood of a potential tenant being evicted, which means:. As a landlord, you want tenants who will pay rent on time, all the time. Landlords should look for any gaps in payments to loans, credit cards, and other financial obligations.

Consistency is a crucial part of financial responsibility, as you want a tenant will consistently pay rent each month. Keep in mind that many Americans are dealing with a great deal of debt across the board, regardless of generation. So be sure to consider what kind of debt your tenant has and if it is considered responsible or irresponsible debts.

If a prospective applicant carries excessive debt, then it may render them unable to handle rent along with all of their other financial obligations. Landlords typically look to see that a prospective tenant makes at least three times the income compared to rent. Derogatory marks may indicate that your prospective new tenant is not financially responsible. Derogatory marks could include:. If your applicant owes an outstanding debt to their previous landlord, then it may be a red flag and indicate that they could fail to pay rent when living in your property.

You should consider asking prospective tenants to submit a rental history report in addition to running a credit check. Always consider reaching out to legal counsel familiar with credit checks and tenancy laws. Give some careful thought to reaching out to legal counsel familiar with credit checks and tenancy laws, but generally, there are multiple ways to check credit that include the following:. Some would-be tenants may show up to rental showings with their own credit reports.

However, this report could be fabricated and contain inaccurate information. Familiarize yourself with credit report-related laws and consider reaching out to legal counsel with any questions. In most cases, this is generally only a viable choice for landlords who have multiple units to rent, and requires a lot more time and effort to complete.

Pulling traditional tenant credit reports usually requires landlords to follow a lengthy process, which may include a landlord identity check, a background check into your business, and a property inspection. This method may prove to be too burdensome for independent landlords, who typically have fewer renters. When it comes to making leasing decisions, you may find it less than ideal to rely on a renter-provided credit report nor jump through the hoops required for using a credit reporting agency.