Introduction
Did you know that your credit history can greatly impact your house hunting? Landlords and property managers usually like to do a rental credit check on potential tenants to minimize their chances of leasing to someone who mightn’t be able to pay rent. For renters, the credit checks may seem daunting but there are different types of checks landlords do. Some credit checks include the actual score while others look at your whole credit report which doesn’t include your credit score.
If you are in a tough spot, it’s best to be honest about it with potential landlords. With that being said, if you are currently struggling to pay rent, consider taking out a loan for rent payment.
What do landlords look for in credit reports?
Landlords do credit checks on tenants to ensure the potential renter has a good financial history and can be trusted to pay rent on time. In a credit check, a landlord wants to see a good credit history and on-time payments. They also want to know if you have declared bankruptcy before or been evicted.
Things landlords check in a credit report
The information they can get depends on the type of rental credit check but here are some things that may show up in that report:
- Credit history
- Mortgage payment histories
- Bankruptcies, eviction reports, and tax liens
- Income details
- Social Security number
Are rental credit checks a soft inquiry or a hard inquiry?
In many cases, a rental credit check is usually a hard inquiry. Hard credit inquiries require your permission and can reduce your credit score by several points because they are calculated as part of the new credit part of your credit score but it is relatively easy to get your score up again with time.
Some landlords may choose to do soft inquiries on your credit, which won’t affect your score at all. These can be done through third-party services by asking you to provide your credit report while accessing a free service.
Can you rent a place if you have average credit or no credit at all?
Though a lot of landlords prefer to do credit checks on potential renters, it’s not a common practice among all property owners. You can look around to find landlords who don’t do credit checks if you have bad or average credit. Some landlords also let people with no credit or bad credit rent a property but would ask for an increased upfront payment like a security deposit.
There are also places available to rent specifically for low-income people. These are catered to those who need affordable but who might not have any credit at all. Another option you have is looking into co-signing loans. That can reassure your landlord since your co-signer will have to meet the credit requirements and also be responsible for the rent.
How to pass a rental credit check?
You might be wondering how you can pass these checks. For example, can you rent an apartment with a 500 or 600 credit score?
Every landlord will have different credit requirements, so it helps to understand what’s considered good and what’s considered average or bad. A credit score of 600 or above is considered great while a credit score of 500 to 600 is considered fair. Anything below 500 is average and poor credit.
If your score is average or bad, you might encounter some rental hurdles. If yours is in that category, you might want to look into other options such as loans for rent or co-signer loans.
Conclusion
Landlords simply want reassurance that you can pay rent on time. If you have a low credit score, you should have an honest conversation with the landlord about your circumstances. You can also provide him with information like current employment and income proof to show you are trustworthy. With all that being said, it’s worth mentioning again that not every landlord does rental credit checks, so it’s possible to rent a place with bad or no credit. We hope this helps you understand how rental credit checks work.
