Credit checks are a major tell-all for landlords. They tell so much about a person’s financial behavior, responsibility, and financial status. The landlord is looking for red flags listed in your data reports. Sometimes, if a landlord chooses to rent to someone with a bad credit score, he can legally increase the security deposit. So, how does a landlord perform a credit check? There are a few different ways for landlords to screen their tenants. They can do this through tenant screening services, credit bureaus, or different landlord associations. Let’s dive into what a landlord may be looking for in your report.

A Good Credit Score

Whether or not you have a good credit score is the first thing a landlord will check for. A score above 670 generally shows that you have a pretty good standing(Buckeye Northwest Realty will work with 600 or better). It is to be noted that this number can vary depending on where you live, your monthly income, and rent. So using apps such a Credit Karma can help you get a better understanding of your score and the things you may need to do to improve it before you credit check.

Late Payments

Every landlord wants a tenant who pays their rent on time, and credit checks can provide them a way to figure out who those people are. These checks will show if you’re consistently paying payments on time annually. The best part of a credit check is to show whether you consistently pay your rent late. Late payments on credit cards, utility bills, car installments, or loans can impact your credit score and affect your probability of getting approved. A credit report can also show if previous landlords have reported money owed.

Credit History

It’s important to understand whether someone is having difficulty paying their bills or if it is a regular thing. A typical credit report will cover 10 years. Information such as bank accounts, credit accounts, loans, credit balances, and other crucial information will be covered. This information lets the landlord know a few different things, for example, whether you can afford rent. It also shows how long you have been at your job, which can hint at your financial stability.

Credit Usage

A credit check would show how much debt you have overall. Any money you’ve taken out for cars or education will be seen. This lets the landlord know you won’t spend more than half your income on bills and rent. Tenants with higher debts may have difficulty paying rent each month.

It is also good to note which kind of debt is responsible and which can be considered reckless. For example, having a student loan would be accountable versus shelling out huge sums of money on an expensive car, which could be considered irresponsible.

Other Relevant History

Factors that could also rule out your application are bankruptcies, evictions, criminal charges, and other issues listed here.

While landlords don’t expect you to have a perfect credit record, having a low score and other problematic factors would affect whether you get approved for your rental. It is always important to look at your credit score so that if you are asked about specific parts, you can back up your information and score.