Guide to Credit Scores and the Apartment Application Process
Your credit score plays a crucial role in the apartment rental process. Whether you are renting an apartment for the first time or rent frequently, what you might not know is all of the details when it comes to accessing and understanding the state of your credit.
A Rundown on Applying for Rentals
It’s common for landlords to require a background check as well as a credit check when submitting your apartment application. The background check is to show the landlord any potential criminal charges or eviction history in your past, while the credit check will show your score and several factors that contributed to it. Some of the things they will be able to see include;
- Student loan payments
- Credit card history
- Opened credit
- Loan applications + loans taken out
- Late payment history
One thing is certain when applying for rentals; landlords pulling your credit report to compare you to other potential renters. If you have a credit score that is around the minimum, which is sometimes 620-600; that signals to the landlord that you’re a potential risk.
They also check credit in different ways; some being hard pulls and other soft pulls. Before they begin to check your credit, ask the landlord what type of credit check they are planning to do. If you want to make sure the landlord doesn’t hit you with a hard credit check, offer to provide your credit report, which will result in a soft credit check.
Do Apartment Credit Checks Hurt your Credit Score?
If you’re looking at different apartments to try to find your dream one that meets your standards and your budget, several landlords may pull your credit report and check your credit score. It’s not as harsh as it sounds though.
As long as your apartment searching doesn’t drag on too long, they typically will ignore inquiries made within 30 days of an apartment application which means your credit score won’t be hurt by multiple credit inquiries.
Can Paying Rent Improve your Credit Score?
Though it might sound scary having your credit score decrease or be influenced by all of these credit inquiries; paying your rent on time may help you build credit. In that case, it’s always smart to ask your landlord or property manager to report your rent payment since you can’t do it yourself. For this to happen, your landlord must report rental history data to the credit bureaus for this to happen.
How to Rent an Apartment with Bad Credit
Before going into an apartment tour or meeting your potential landlord, it’s good to be upfront about your credit score. If any factors contributed to the low score, let the landlord know about it. If you’ve made improvements since finding out about the score, try to show pay stubs to prove you can make monthly payments. Being upfront and honest will show the potential landlords that you’re aware of the mistakes and are being responsible for them.
