Can My Credit Score Affect Renting?

Can My Credit Score Affect Renting? article image.

Your credit score may not prevent you from renting a place to live, but landlords may consider it when deciding whether to approve your rental application. State and federal housing laws regulate what criteria landlords can use to reject a potential renter's application. Still, credit can factor into a landlord's decision, as well as an applicant's refusal to undergo a credit check.

About 36% of the country's 122.8 million households were renters in 2019, the most recent year for which the U.S. Census Bureau has reliable estimates, according to the Pew Research Center. If you're among those numbers, it's important you understand how your credit can affect your renting prospects.

Will My Credit Score Affect My Ability to Rent?

When a landlord runs a credit check on a potential renter, they likely won't zero in on the person's credit score. In fact, a landlord might not care at all about the credit score. Instead, the landlord might concentrate more on the potential renter's overall credit history, particularly their record of on-time payments.

A landlord is trying to assess the likelihood that you'll pay your rent on time every month, and reviewing your track record of managing your debts can help them with that. A credit history free of negative marks could tip the landlord's decision to approve you, while lackluster credit may cause the landlord to ask for other assurances—such as a higher security deposit.

The commonly used FICO® Score ranks payment history as the most important factor in calculating your score, assigning it a weight of 35%. The other factors are how much debt you carry (30%), the length of your credit history (15%), new credit (10%) and the types of credit accounts in your credit report (10%).

What Credit Score Do I Need to Rent an Apartment?

There's no specific FICO® Score that will determine whether or not you can move into a new apartment.

While your FICO® Score may not be the No. 1 factor in deciding whether you'll be approved for an apartment lease, a higher score may give you an advantage. That's especially true in a competitive rental market, where higher-rent apartments may demand a higher credit score.

FICO® Scores range from 300 to 850, and a FICO® Score above 670 indicates good credit. However, a FICO® Score below 670 doesn't necessarily mean a landlord will reject your rental application outright. A landlord may scrutinize your application more closely if your FICO® Score is low, but the score that gets you in the door can depend on the type of apartment you want to rent, the rent you'll be paying, the state of the local rental market and your income. Your landlord may not even consider your credit at all when reviewing your application. FICO® Scores don't include income as a factor, nor is your income included on your credit report.

Before you submit a rental application, you can get your free Experian credit report to help you understand where your credit stands. To get your credit move-in ready, review your credit report and take the time to address any issues you find, such as high credit card balances.

How to Pass a Rental Credit Check

A landlord might take a close look at the information in your credit report when deciding whether to approve your application. Plenty of factors typically will be examined. They include:

  • Ratio of debt to income (you'll likely be asked to report your income on your rental application)
  • Bankruptcies
  • Foreclosures
  • Defaults on loans
  • Delinquent accounts
  • Charge-offs, meaning a creditor has written off your debt as unpaid and has closed your account
  • Auto repossessions

Keep in mind that items like foreclosures or a bankruptcy might be more important to a landlord than hefty credit card balances or a couple of late credit card payments. Also, you should know that a landlord typically can deny your rental application if you refuse to authorize credit and background checks.

It's worth noting that evictions and your history of paying rent don't automatically appear on your credit report. That's because landlords and property management companies don't always report your payment activity to the three major credit reporting bureaus—Experian, TransUnion and Equifax. They also won't submit information to the credit bureaus about evictions, bounced checks, broken leases or property damage. Unpaid rent may show up on your credit report if the debt wound up going to collections, however.

Your history as a renter can also show up in your rental history report, which is a separate report landlords can request through services like Experian RentBureau. Rental history reports show things like evictions, late payments you've made in the past, broken leases and bad checks.

To help ensure you pass a landlord credit check:

  • Pay all of your bills, including your rent, on time.
  • Pay off credit cards and loans.
  • Dispute information on your credit report that you believe to be incorrect, such as accounts reported as late that your records show to be current.
  • Keep spending well below your credit limits to protect your credit utilization ratio.
  • Consider signing up for Experian Boost , which reports payments on things like cellphone service, utilities and certain streaming services to credit bureaus.

If you have a poor credit score, you can improve your odds of your rental application being approved by:

  • Explaining your circumstances. A landlord may give you some leeway if, for instance, your credit was damaged because of a divorce or you lost a job but now have a new one and are now getting back on your feet financially.
  • Getting a cosigner for your lease who's got good credit.
  • Providing concrete proof of your income, such as recent pay stubs.

The Bottom Line

Your credit score may affect your ability to rent a place, so make sure you know what it is and work toward a good score. To track the condition of your credit, obtain your free Experian credit report and free Experian credit score.

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