When you step into an apartment leasing office, the first thing that they ask you to do is fill out an interest form. Then they show you an apartment. If you like the apartment, you complete an application and then wait for them to submit your information to an agency for approval. This can sometimes hours or days. All you know is that they are checking your credit but what agency are they using and what type of report are they checking?
What Reports Do they Check?
The leasing company is running a credit report to check your credit. They will usually ask you to sign an agreement allowing them to do this. The apartment complex may check one agency report such as Experian, TransUnion or Equifax or they may check your overall FICO score, which is a combination of all three reports. Most leasing companies typically use one agency for credit checks, as this is the most cost-effective option for them. Another report that apartment complexes usually check is a rental history report. This report is available from a number of different agencies such as AmerUSA Tenant Screening, TransUnion or Experian’s tenant screening.
Why Do They Check These Reports?
The apartment leasing company is trying to get an indication of what kind of renter you will be. If your credit report is fair to good, then that is a good indication that you pay your bills on time and that you are fiscally responsible. For the leasing agency, this translates into you paying your rent on time and being a responsible tenant. The rental report shows that you do not have any evictions on your record, that you left your last apartment home in good condition, and that you were a model tenant. It is not that the apartment complex does not want to take your word, that you are a good tenant, it is just that they do not want to take any chances.
What Can You Do if You Have Bad Credit?
If you are leasing an apartment and you know that your credit is not good due to late payments, foreclosure or bankruptcy, it is best to be upfront about it and explain the circumstances. If your rental history is good, it may be enough to overcome the negative credit score. If you have a foreclosure or bankruptcy on your credit report, talk to the leasing manager and see if they can work with you. They may require more upfront payment like first and last month’s rent.
What Can You Do if You have an Eviction?
If you have an eviction on your credit report, you will likely have a tough time renting an apartment. Evictions show up on credit reports and rental reports and they are not viewed favorably. One option is to pursue a private rental such as a home or condominium. Private property owners often do not run credit checks and if they do, they may be more forgiving and easier to work with than an apartment leasing agency. If renting a private home or condominium is not an option, talk to the apartment leasing agency about a co-signer or perhaps paying a higher security deposit. Some apartment complexes offer month-to-month leases, which may be an option if you have an eviction on your record. This way you can prove to them, you are a model tenant without a big contract commitment on their part.