Your Credit Report and Renting – What You Need to Know

If you are looking to rent an apartment or a home, you need to be aware that one of the first things that landlords and property managers look at is your credit history and your credit report score as part of the application process. The landlord alone determines what an acceptable credit report score is, so your best offense is knowledge of what your credit report says.

Landlords specifically will look at your employment history, your history of payments with creditors and if you’ve paid these on time or late, and if you’ve declared bankruptcy or struggled with any sort of financial hardship. Any negative feedback on the credit report indicates that you are a financial risk to the landlord. The landlord will also look at how many, if any, credit report requests have been made within a certain time period. This is a sign that you have applied for credit frequently, and as a result that you have many potential debts, either secured or unsecured. The landlord also will see exactly how much debt you have and to whom you owe it, and for how long you have owed it. The landlord considers all of these things when you apply to rent a residence.

The negative items on your credit report that might give a landlord reason or cause to deny your application are many, but all are somewhat related. If you have balances on loans or credit cards that are very high and you are paying only the minimums, or if you have too many creditors, the landlord sees that as low cash flow and you may not be able to afford the rent payment. Even having too little credit history with no references or background information could affect a landlord’s decision to accept your rental application.

Your credit report and score are your financial history. Landlords cannot usually afford to take risks, as they also have bills to pay on their rental properties in the form of taxes, fees, and maintenance. If you do not pay on time, they cannot pay on time, and their credit is subsequently affected. Make sure that you are familiar with what is on your credit report, and be able to discuss it with your landlord. Some may accept a trial period in the form a short-term lease to allow you to prove your financial worthiness. Others may accept an offer of an increased security deposit as an offer of good faith and confidence in ability to pay. Whatever the reason for a landlord’s decision, you should be aware before the process begins of the potential warning signs on your credit report, so there are no surprises for you at the outcome of the application process.

To obtain a free copy of your credit report visit www.annualcreditreport.com

If you are a landlord or property manager interested in screening a prospective tenant view your tenant credit report options at www.starpointtenantscreening.com

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