Has your landlord ever told you that you need to make repairs yourself? Do they refuse to address chronic noise issues around your apartment? Or, perhaps they’ve asked you to move out… immediately. While laws vary from state to state, there are certain things your landlord doesn’t have the right to do. Read on to find out more about your tenant rights and what to do to combat illegal landlord actions. Read the rest of this entry »
As part seven of our series about renting with credit, we’re looking at the way landlords handle renters and their credit. Once you have toured the property, talked with a leasing agent, and filled out the apartment’s rental application, the review process begins and your fate is in the landlord’s hands. So what happens after you hand over that apartment application? Here is a basic breakdown of what landlords need from a credit check.
Why do landlords require a credit check?
Landlords run credit checks because before accepting you as a renter, they need to know how reliable you will be as a tenant. Apartment landlords want to be sure you will consistently and punctually pay your rent and other bills, and that you will be able to pay your deposits. Landlords also want to know if you have been a reliable renter in the past, which is something your rental history will reveal.
What do landlords look for in a credit check?
When landlords run a credit check, they are looking for a variety of things. Because your credit report is basically a summation of your financial history, they are looking for inconsistencies or irresponsible behavior. Examples include late bill payments on everything from monthly rent to student loans, conviction of a crime, eviction, involvement in any type of lawsuit, and a credit history. They are also looking at your rental history to determine what kind of renter you were at your previous home.
How do landlords run a check credit?
To check your credit, landlords will work with a credit reporting agency or a tenant screening service. They will need your name, current address, social security number or individual taxpayer identification number, and your authorization to run a credit check. All of these are usually required on the apartment’s application. In many cases, landlords are legally allowed to charge you for the credit check. The request for a credit report will issue a hard inquiry on your report, which might have a negative effect on your credit score, so you may want to provide your potential landlord with a copy of your report along with your apartment’s application. However, note that in most cases the landlord is not required by law to accept it.
For more tips about renting apartments and credit, be sure to check out the rest of our series about credit, including Apartment Credit Scores 101, 5 Ways to Improve Your Credit Score, and How to Rent an Apartment with Bad Credit. Have a question about renting apartments and credit that wasn’t answered in our series? Find AparmentSearch.com on Twitter and Facebook and ask us.
I remember when I rented my first apartment, my landlord asked me for my information for a credit check. Having just finished my freshman year of college, I had no credit history to speak of let alone any clue what they might want to know from my credit history. I had a cosigner for my first apartment but through the years I’ve had to make sure my credit score is good so that I can continue to be able to rent an apartment. A landlord wants to ensure that the tenants they select are responsible and will take care of their property and pay their rent on time. Performing a credit check on a prospective tenant can give a landlord a reasonable indication of what to expect from that tenant.
Here is what most landlords actually look for when they check your credit report:
It’s a no-brainer that the more debt you have, the less likely a landlord is willing to rent to you. Landlords run credit checks to see how much debt prospective tenants have. Once they know your debt load, they often compare that to your income to see if you can afford to rent the apartment while still being able to pay off your debt. If your income and debt load do not match up, the landlord will not be likely to rent to you.
Consistency and Predictability
Landlords look at a potential tenant’s credit report for evidence that the candidate has established consistency, stability and predictability in their finances. Consistency is demonstrated by what a prospective tenant does over and over financially. If a credit check reveals that a borrower has on-time payments with several accounts, over several years, then he or she is consistent. Stability can be determined by a number of factors. The number of years you’ve held a job, the number of accounts you have open, and your payment history all contribute to stability. A potential tenant who can handle his or her financial obligations and works for the same employer long-term is a financially stable individual. Landlords check credit reports to predict the behavior of the person who will be renting the property. The more consistent and predictable you are with your job and your finances, the more likely you are to be approved to rent an apartment!
A landlord can check a prospective tenant’s rental history through a credit report. A landlord can use rental history data to see where you have lived and make inquires concerning your previous rental agreements to see if you paid your rent on time or owe any money to your previous landlord. They will check your rental history for predictions on your future behavior as a renter. Rental payment history only goes on your credit report if your landlord reports your payment history to a credit bureau. One of the main ways I build credit is through paying my rent. I don’t have any other big expenses to build credit with other than my rent so I pay my rent online through WilliamPaid and they report my payments to a credit bureau so that every time I pay my rent on time each month, it goes towards building my credit. This helps not only my personal credit but also makes me more likely to be approved for an apartment in the future!
Submitted by WilliamPaid.com. WilliamPaid lets renters & roomies pay rent online, automatically, with more flexibility and it’s FREE. Users can also build credit with each rent payment.