A Renters Guide: Checking Your Credit

Rent

Check Your Credit

You know it’s going to happen. You found the perfect apartment, and you need to move in right away. But, the landlord wants to do the dreaded credit check. What is the landlord hoping to find? Do you know what your credit report says?

Landlords want to know everything that will help them determine if you will be a good tenant. They are looking at your credit report for everything from chronic late payments;to unpaid accounts and bankruptcies;to eviction histories and even if you have debts.

According to the Fair and Accurate Credit Transactions Act of 2003 (FACTA) all annual credit reports are free, so there’s no reason not to check yours on a regular basis. Through FACTA you can get a free copy of your credit report from each of the three major credit bureaus – Equifax, Experian, and TransUnion – each year. You can (and should) use these services to monitor your credit history. Here is what you need to know to get started:

  1. Consumer.gov summarizes credit history, in short, “how you use your money.” Loans, credit cards, whether or not you pay your bills on time are all fair game on a credit report.
  • A credit report is a summary of your credit history. It details your name, address, social security number, credit cards, loans, and how much money you owe, and whether or not you pay your bills on time.
  • Serious no-no’s on that credit report would be bankruptcy, repeatedly paying your bills late, foreclosure, repossession and lawsuit judgments.

So the next obvious question is this: what do you do if that’s you?

A. Once a blunder hits the credit history it’s usually there for seven years, with the exception of bankruptcy, which will remain on your credit history for ten years. Although these will expire from your credit history with time, they remain on your public record with your local court indefinitely. However, there are a few ways to repair your credit.

  • Pay off past due balances like charge-offs and debt collections.
  • Reduce high balances so they are less than 10-30% of your credit limit.
  • Pay off loans.
  • Have a few active, positive accounts on your credit report.
  • Apply for a secured credit card if you can’t get approved for any other credit card.

So what can you do to avoid this?

A. Check your credit history at least once a year and take necessary strides to improve it. Always use a link from the FTC's free credit report information site, to make sure you don’t land on a scam site.

Also keep this in mind for future credit checks: YOU HAVE RIGHTS.

  • Your Landlord needs your written consent in order to run a credit check, meaning you can refuse.
  • The Landlord must also be approved by a credit check or tenant screening company to run credit checks on prospective clients.
  • If a Landlord refuses to rent to you on the grounds of bad credit they are required to send you an “Adverse Action” letter, detailing the reasons why you were denied and must be sent in a “reasonable amount of time,” as dictated by the Fair Credit Reporting Act (FCRA).
  • They are required to adhere to the all other terms of the FCRA.
  • And in case you HAVEN’T been checking your credit history (please start) – you can see which companies have been checking up on you in your yearly report.

You might assume that real estate agents only assist with the purchase and sale of a home, but there are many who specialize in rental property. Use our ‘Meet an Agent’ tool to find an agent to help you navigate the complicated waters of renting a home.

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