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What Do Landlords Look for in a Credit Check?

Timely rent payment is one of a landlord's biggest concerns. So, to better evaluate which applicants are most likely to pay on time, landlords may use credit information to screen tenants. If you're wondering about the credit information you'll need for your next rental, here's what you need to know.

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.

When credit scores are considered as part of your overall credit information, a score above 670—on a FICO® Score range of 300 to 850—generally indicates good creditworthiness. 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 670 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 mid-600s and below. In a competitive rental market, the higher your credit score, the better.

What Goes Into a Rental Credit Check

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 doesn't have to be spotless to get approved for an apartment. A couple of late payments or high credit card balances may not be grounds for rejection. However, having an eviction in your record puts you at a higher risk of having your application rejected, especially if you still have an unpaid balance related to the eviction. You might also find it harder to get approved if you have other serious delinquencies like loan default, bankruptcy, foreclosure, repossession, or charge-offs.

Renting Without Great Credit

If you don't meet the credit qualifications, all's not lost. There may be a few ways to get your foot in the door, depending on the landlord. For starters, you may be able to pay a higher security deposit or cover a few months of rent in advance. Paying more money upfront may eliminate some of the risks associated with your previous credit mistakes.

Having someone vouch for you, either rental references or a co-signer can give you some additional credibility. Or, in the case of a co-signer, there's another person sharing the risk with you, which may make it easier to get approved.

You also may have more success with an individual landlord rather than a property management company whose rules tend to be less flexible.

On the flip side, a higher credit score doesn't get you a better rental rate, but having good credit may give you the benefit of moving in with a low or no security deposit requirement.

Looking for information on how to manage your credit during coronavirus? Check out Protecting Your Credit During Coronavirus Outbreak.

LaToya Irby

LaToya Irby is a financial writer with over 14 years of experience. She's been quoted and published as a credit expert in several major publications including USA Today, U.S. News and World Report, TheBalance.com, and The Chicago Tribune.