A credit check is an official inquiry to one or more of the three major credit reporting agencies — Equifax, Experian and TransUnion — to determine the ability of a potential renter to pay back debts owed.
Credit checks are useful for property owners to determine whether or not a renter can be trusted to pay their rent in full and on time each month.
There are many times in your life where you'll be subjected to a credit check. However, one of the most frequent occasions is when you're renting a home.
This is because all of your rental history is reported to the three major agencies, meaning property owners can get a clear understanding of not only your financial standing currently, but how reliable of a renter you have been in the past.
Each agency has an undisclosed process for determining their reporting of your credit score, meaning that each agency will report a slightly different number for you.
However, there are some well-known factors that help and hurt your credit across the board.
By this point, you might be wondering how your credit score compares to what an acceptable score might be.
Various credit agencies will have different standards to rate their scores. However, you should consider 300-629 as bad, 630-689 as fair, 690-719 as good and 720-850 as very good.
Luckily, you have the option to check your own score. There are websites where you can do this for free, many of which will not negatively affect your score, which is a possibility when checking.
Most commonly, all you need to check your score is your name, social security number and date of birth, though you may be asked to confirm or deny additional details to make sure you are correctly identified.
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