Yes, You Need A Credit Report AND A Credit Score To Rent An Apartment!

Looking to rent an apartment in a hot market? You need a credit report and a credit score to be considered by landlords.

I’ve been a landlord since 2005 in San Francisco and I always ask for a credit score and a credit report. These two pieces of information are basic.

The Competitive Rental Market

When I hosted my open house for one of my rentals last fall the demand was overwhelming. Over 50 parties showed up and by the end of the day I had 20 applications on my dining table. Each application contained at least one bank statement, an earnings statement, a letter of reference, sometimes a resume, and of course their latest credit score.

My asking price was $3,300, which in retrospect was probably $200 a month too low given the amount of demand I received. I felt too guilty raising the price after the advertisement, so I let it be, hoping someone would offer more instead. I was offered free meals and back massages instead curiously enough.

The good thing about so much demand is that I got to be more picky because nothing is worse than having a problem tenant who always complains, makes a lot of noise, and is always late on rent.

Thank goodness I haven’t had one of these type of problem tenants yet, and I don’t ever plan to have one if I maintain a disciplined approach to screening.

With so many applications on the very first day, guess which document I looked at first to screen? The credit score report of course!

You Need A Credit Score And Credit Report To Rent An Apartment

About seven of the twenty applicants had a credit report, but no actual credit score. I was flummoxed, wondering whether the report was missing a page? 

It turns out that the applicants used a service that provides one’s credit history (important for fraud and false reports), but no actual score by which to judge!  Thanks to the comments on the post, “Who Should Check Their Credit Scores?” I finally realized what these reports were.

At the time I thought providing a credit report with no credit score was very fishy and annoying frankly.  As a result, I put those seven applicants in the bottom group.  Don’t they want to know what their credit score is at least? I kept thinking to myself.

I then separated the rest of the applications between those who had over a 720+ (good enough for me) credit score and those who did not.

Best Group: Nine applicants all with credit scores above 720.

Middle Group: Four applicants with credit scores between 680-719.

Bottom Group: Seven applicants with good incomes but no credit scores, just reports.

After spending several minutes sorting out the applications by credit score, I then looked at income, assets, occupation, and any letters of references from the best group first. With nine applications in the best group with credit scores over 720, the other 11 applications really had little chance unfortunately.

Landlord’s Perspective When Evaluating Credit Scores 

If there are nine applicants with 760 credit scores, $80,000 in liquid assets, who all make over $150,000 income, why would anybody choose another applicant with a 680 credit score, with the same income and assets?

Sure, the applicant with a 680 credit score might be really thoughtful and nice, but so are the other applicants! You can’t risk going with a lower credit score applicant unless that’s all you’ve got.

One of the applicants was a third year cardiologist who made $320,000 a year. Unfortunately, he only had a 675 credit score because he whiffed on his medical school payments! No thank you buddy! I don’t care how much you make if you don’t pay your bills!

The Credit Score Is A Window Into One’s Soul

Just like how employers screen the first cut of applicants based on grades, landlords do the same with credit scores. If you’re one of those job applicants who purposefully omits their GPA on their resume, like the seven applicants who included a report but had no score, you’re going to be looked at with suspicion.

Your other criteria will be highly scrutinized to the point where the landlord/employer will find reasons not to choose you.

Don’t provide a credit report without a credit score. If you do, it will drive your landlord NUTS! Spend the time to find out what your credit score is before you even bother applying.

Landlords don’t have time to go through every single line-item in your credit report. They want that credit score and any explanations you care to add.  

The credit score is the first thing landlords look at in a tight rental market. Having a credit score is MUCH better than having a credit report with no score. Don’t let landlords start wondering what else you may be hiding!

Finally, if you don’t want to provide your credit score or credit report, that’s fine as well. Just know that your landlord has every right not to accept you as a tenant.

Nobody is forcing anybody to do anything on both sides. If you want a tenant bad enough as a landlord, you may let things slide. If you want the apartment bad enough as a tenant, you’re going to do everything possible to prove you are a credit worthy person.

Recommendations For Renters

Refinance Your Expensive Debt:

With a good or improving credit score, you should highly consider refinancing your expensive student loan, mortgage, or credit card debt with Credible. Credible is a top lending marketplace that provides real quotes, all in one place. It is the efficient way to get the best deal out there.

NMLS ID# 1681276, Address: 320 Blackwell St. Ste 200, Durham, NC, 27701

Get renter’s insurance:

Once you rent a property, it’s important to get renter’s insurance to protect your belongings. Some thorough landlords require renter’s insurance as well. Renter’s insurance is actually quite cheap. Check out PolicyGenius to get the best and cheapest renter’s insurance policies today.

Invest in real estate:

Real estate is a core asset class that has proven to build long-term wealth for Americans. Real estate is a tangible asset that provides utility and a steady stream of income if you own rental properties.

Even as a renter, you should invest some of your assets to keep up and beat inflation. Check out Fundrise. Fundrise is a way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing.

Photo: View Of San Francisco Bay