Before agreeing to rent an apartment, potential landlords usually want to make sure you're financially responsible, which means you will pay your rent every month. This is why many landlords run an apartment credit check on all applicants.
Prospective tenants with a good credit history and proof that they pay their bills on time show landlords they're probably going to also pay their rent on time.
An apartment credit check shows your credit history. It lists your bank and credit card account balances, as well as any outstanding loans or payments you owe.
Landlords do apartment credit checks to find out if potential renters will pay their rent on time. To make sure you are responsible, landlords use screening tools such as credit reports, which provide your bill-paying history. Landlords need your written permission before running a credit check and will ask you to sign a credit screening document or a rental agreement.
To request a credit report, landlords can go through tenant screening companies, landlord associations or directly to the three major credit bureaus: Equifax, Experian and TransUnion.
These bureaus may report different information, giving a landlord a good overall idea of your creditworthiness and financial position.
You will likely be asked to provide the following information:
Landlords may also ask you directly about your credit history. Some charge an application fee that includes the price of running a credit check. The process can take minutes or several days, depending on how the landlord decides to do the apartment credit check.
When landlords run a credit check, they want clues to how financially responsible you are. Things like prior evictions from other rental units, your debt load and significant credit mishaps help them determine whether you are likely to pay your rent on time each month. Here's what they will look for:
Landlords will focus on your actual credit information, beginning with your FICO Score: A score above 670 usually shows a potential landlord that you have a good credit record, but this number can vary depending on where you live, your income, the monthly rent, and how competitive the local rental market is.
Most landlords just want to know that you'll pay your rent every month. A credit check will show whether a prospective tenant consistently pays on time, year after year.
Landlords can check a credit report to see if any previous landlords have reported money still owing.
To be sure you can afford the apartment's rent, a landlord will want to know how long you've been at your job, and how much you earn. A renter who has been with the same company for many years shows financial stability.
A credit check will reveal how much debt you carry — including any loans you have taken out for cars or education. Usually, landlords want to make sure you won't spend more than half of your gross income on bills and rent.
Some landlords will also pay for a service that screens tenants to see if they've ever declared bankruptcy, been evicted, faced criminal charges or have any delinquent accounts or defaults on a loan.
Since bankruptcies remain on your credit report for up to 10 years, a landlord can see which accounts are still owed money, which might affect whether you get an apartment.
While landlords usually don't expect you to have a perfect credit record, they may not allow you to rent an apartment if they find out your car was recently repossessed or you haven't made payments to your credit cards in months.
Landlords usually ask potential tenants with no credit history to find someone — a friend or family member with good credit — to co-sign your lease. This basically means they commit to paying the rent if you don't.
You can also try showing past utility bills or a record of previous rent payments that prove you've been a responsible tenant. Submit references from other landlords, along with former and current bosses.
If you have bad credit, things get more complicated depending on the reasons why. For example, if you were without a job for several months, temporary bad credit might be forgiven.
Here's how you can still rent an apartment with fair or poor credit history:
You can improve your chances of getting the apartment by checking your credit report. The Fair Credit Reporting Act allows consumers to receive one free credit report per year from each of the three major credit bureaus. Make sure to check for errors on your report, and get them fixed right away.
While you can't control how a landlord interprets your credit report, you can prepare to answer any questions that might come up. It's a good idea to check your report, fix any mistakes, gather your pay stubs and references before going through an apartment credit check.
Wendy Helfenbaum is a Montreal-based journalist and television producer with 25 years of experience. She writes about real estate, design, architecture, DIY, gardening and travel for many publications and websites, including Apartment Therapy, Metropolis, AARP, Home in Canada, PBS’ NextAvenue, Realtor.com, Country Gardens and dozens more. Downtime passions include skiing, travel, DIY, waiting for the next Springsteen tour and hoping the Montreal Canadiens finally win another Stanley Cup.