Credit Checks For Renters: Everything You Need To Know

Latest update: June 08, 2022

When you’re searching for a new rental unit there are a lot of steps you need to take before landing your dream apartment. Along with a rental application, background check and references from previous landlords, your potential landlord will most likely ask for a credit check. But, what is a credit check and how can you get one? Let’s take a closer look. 

What is a Credit Check?

A credit check is a copy of your credit report that shows your credit history of how you’ve been paying rent in the past. Your payment history helps the landlord to complete a tenant screening and to confirm your financial status and your ability to make timely rent payments. Poor credit and a low credit score will hinder your chances in securing a rental property as they reflect a lack of financial responsibility and a difficulty to pay rent.

The Importance of Good Credit Score

Equifax and TransUnion use a sliding scale between 300 and 900. Anything above 700 is considered to be a good credit score, while anything between 600 and 750 is the consumer average. If your credit score is below 600, you’ll want to work to raise your credit score to the 700 range. 

How To Get a Credit Check

Once a landlord receives your approval, they can apply to receive your credit score. As a potential tenant, you will need to provide your date of birth and SIN. A Credit check usually takeS a few minutes to complete online. It may be a better idea for you to perform the credit check on your own on platforms like TransUnion or Credit Karma for your landlord. This will show them that you are serious about and committed to the listing. 

Are Credit Checks Free?

This depends on the platform you use for the credit check. Credit Karma is a credit reporting agency that you can use online for free. Sometimes, a landlord will specify where they want the credit check to be from. Other platforms like Equifax and TransUnion, which are the most popular platforms, charge a fee to use the service. Make sure to confirm with your landlord whether they prefer you use a specific platform for your credit check.

What Do Landlords Look For In Credit Checks?

Potential landlords ask for credit checks because they want to know whether their prospective tenants can make your monthly payments on time. A credit check will show a landlord whether or not you have any bankruptcies, debt, delinquent payments or other financial missteps in your bank account. Your credit report will show your landlord your rental history and whether or not you are financially responsible.

Are Apartment Credit Checks Strict? 

Landlords will want to access credit reports to make sure that you’re diligent with your finances and will make your monthly payments. If you have a bad credit score on your credit report, it could affect your ability to rent an apartment. A landlord may also contact your current employer and previous landlord and run background checks for criminal records or any negative information. Most landlords will do a credit check, so make sure to have your credit score in order before applying to apartment rentals. 

How To Rent an Apartment With Bad Credit

You may be wondering if it’s possible to rent an apartment with bad credit as a prospective tenant. This depends on the prospective landlord, as well as why you have bad credit. Did you have a failed business, loans, a case of fraud, a divorce, or bankruptcy? The best policy is to be honest with the landlord or property managers and explain why you have bad credit. That way, the landlord can make an informed decision about whether to approve you as a tenant or not. If you have bad credit, you will want to work hard to improve your credit and raise your credit score. 

Now that you know everything there is to know about credit checks, you can start applying to potential homes and apartments. As a prospective renter, you want to make the best impression possible and know what your credit score is and be working towards improving your credit score. With these tips, you’ll be securing your dream apartment in no time.

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