Does Rental Credit Check Affect Score?
Is Rental Credit Check Harmful for Your Credit Score?
Usually doing a credit check on the candidate, the landlord of an apartment or a home will be able to determine if the applicant pays their payments on time and is financially conscientious. Though it shows up on a credit report, a rental credit check is a kind of inquiry that does not influence the credit score. Frequent rental credit checks in a short period will, however, have a negative effect and demonstrate to the creditors your great need for the flat.
What is a Rental Credit Check?
A rental credit check enables the landlords to see your credit report and your credit score to determine your renting risk level. Tenants are significant to landlords due to their capacity to pay the agreed rent amount every month. They get to see your past payment behavior on loans and credit cards when reviewing your credit report.
Oh yes, landlords only make a soft pull on your credit, not a hard pull. Soft inquiries are not considered credit reports and therefore do not influence your credit score. Soft credit checks, like the one done when a company runs your credit to make you a pre-approved offer for a credit card, do not affect your score at all while hard checks; like the ones done when you apply for a new credit card, do it slightly.
Multiple Credit Checks May Cause Your Score to Drop
Credit reporting companies are aware, nonetheless, that you will have to make some queries when searching for an apartment. On the other hand, if you send too many checks in a short time, it will give the idea that you are in great need of a house and that money could be a problem with you. Depending on your credit history, this might result in as much as a 50% drop in your credit score or a few points.
Renting credit checks should not run more than five in two weeks, per advice. Make no more than one application on the same day or for different apartments housed under the same landlord.
Can Apartment Credit Checks Refuse You Housing?
Rental credit checks are common among most landlords, however, having a poor credit score does not always mean that they cannot lease an apartment. Some landlords are ok with giving applicants with poor credit history if they have a good rental history or steady income. Nevertheless, anticipate placing a bigger security deposit for a bad credit status.
Federal housing laws prohibit landlords from denying you solely based on.
- Credit score
- The absence of a credit history
- Bankruptcy or foreclosure in the past
- Student loans
- Medical debts
- Maintenance payments – spousal or child support duties
You also can not be denied solely because you get these public assistance funds. Housing managers who refuse applicants with less-than-perfect credit scores might violate the Fair Housing Act.
How to Establish Your Credit for Apartment Hunting?
If your credit score is low, begin the process of rebuilding it several months before your lease expires to increase your chances of getting a better rental. Steps that help boost your score include.
- Timely payments of all bills – Ensure credit card, loan, and utility bills are paid without failure by arranging to be automatically billed for them. One of the largest factors in your credit score is your payment history.
- Reduce utilizations - Maintain credit card balances to a small percentage of the credit limits. Credit is pulled down by high debt usage.
- Do not close old accounts – This also contributes to your credit score. Do not cut up or cancel old credit cards unless they carry an annual fee.
- Avoid hard credit checks – Avoid applying for new credit during the period of credit repair. Lack of focus is an indication of risk when many inquiries are detected.
- Add positive information – Getting an authorized user on someone else’s credit card to add credit account history. Or opt for a credit-building loan.
- Monitoring of reports – It is recommended to monitor the credit reports from Equifax, Experts, and TransUnion every 4 months to ensure that all the information is accurate. Dispute any errors immediately.
The best chance of being approved for an apartment is when you are hunting for a house with a better credit score. However, before your next credit check, you still have options about renting your dream home even if you have less than perfect credit.
Is It Mandatory to Perform a Credit Check on a Candidate Seeking to Rent a House or Apartment?
Many landlords only perform tenant credit checks on the prime tenant or the tenant who signs the lease. For instance, when you apply for an apartment and you are accompanied by your partner, the landlord may only conduct a credit check on the principal applicant.
However, in some cases, landlords may request credit reports on everyone over 18 years of age who intends to live in the unit. Check the property’s screening requirements well before submitting your application.
What Can My Landlord See on My Credit Report?
When landlords do credit checks for rental applications, they can view much of the same information as creditors.
- Sensitive information – Your legal name, address history, date of birth, SSN, and your work history.
- Credit score – The minimum credit score you should have towards your tenancy is 600.
- Account history – This is information about your loans, credit cards, student loans, mortgages, etc., and it is made up of account opening dates, credit limits or loan amounts, monthly payments, and records of timely payments.
- Credit reports - contain such information from public records as bankruptcies, foreclosures, tax liens, judgments, child support obligations, and others; unpaid debts are reflected here.
- Inquiries - List of all the people who have looked at your credit report in the last two years including the companies that checked your credit report.
Therefore, a rental credit check provides the landlords with general information about your financial reliability.
How to obtain a Credit Report with no charges?
According to Federal law, you are allowed to access your credit report from each of the three major credit bureaus once each year at no charge. Visit AnnualCreditReportcom to get Equifax, Experian, and TransUnion reports to assess any discrepancies before a significant purchase such as auto financing or apartment leasing.
You can also do a hard credit check on yourself without affecting the score of your credit. Check all accounts on your credit report like credit limits of loans, payment history, credit age, recent inquiries, and collection accounts. To correct any mistake that you find on the reports, you should challenge the error with the exact bureaus within 7 days. The best, most favorable credit score is achieved by using accurate information.
Ready to boost your credit score? Call +1 888-804-0104 now for the best credit repair services near you! Our expert team is here to help you achieve financial freedom and improve your credit. Don't wait—get started today!