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4 Things Every Landlord Thinks About Your Credit Score

should i rent with bad credit
If you rent, your landlord may check your credit score. But what do they really think when they see that three-digit number?

You’ll need to submit a lot of personal information to a landlord when you find a great apartment for rent. And that can be a challenging process, especially in a competitive rental market like Washington, DC, or New York, NY. What’s a landlord looking for? What information can you submit to show you’re the best tenant for the space you want? And how heavily does your credit factor into the decision?

If you’ve ever wondered what potential landlords really think when they review your credit report with your rental application, read on. In addition to examining the data from Trulia’s Rental Resume tool, we consulted landlords and financial pros to understand the importance of that three-digit number — and how owners of rental units react when they see it.

1. Do you have good financial habits?

Your credit score isn’t an arbitrary number, and landlords want to see yours because it gives them an idea of how solid your financial foundation is. “There are three factors that landlords look at when making the decision to rent to a prospective tenant: your income and employment history, your history with landlords, and your credit,” explains Thomas O’Connor, a property manager at Boston Property Care. “A credit report gives the landlord a window to the applicant’s overall payment history of their financial obligations.”

2. Your low score isn’t (always) a deal breaker

As it turns out, not every landlord thinks your low credit score is that bad. Greg Johnson rents out property and shares his family’s experiences at Club Thrifty. He says it’s not unexpected to get rental applicants with low credit scores. They’re just one measure of a person’s financial health.

“In our area, housing is relatively cheap,” he explains. “Most people rent because they can’t get a loan. We have and do rent to applicants with bad credit, provided that their income qualifies and what they’ve told us on the application is accurate.”

Instead of fixating on just the score, Johnson looks for a history of past-due accounts or accounts in default. “We want to know whether or not the applicant has skipped out on their bills before,” he shares. “If they have, it could be a good indication that they may not be able to fulfill their part of the lease.”

Philip Taylor, founder of PT Money and a financial media conference known as FinCon, gathers credit reports to look for information that shows someone is financially stable and responsible enough to rent long term. “I’m looking for evidence of late payments or other negative issues,” he shares. While seeing a high score makes Taylor feel better about a renter, a low score doesn’t automatically rule someone out. “When I see a low credit score, I think the prospective tenant likely has issues with managing their finances — but the date and timeline of the issues matters too.”

3. Good credit scores don’t automatically mean you’ll be a great renter

Most landlords think the same thing when they see a good credit score: They feel more comfortable offering a lease agreement, because conventional wisdom dictates those with good credit scores present a lower risk of missing rent payments or refusing to pay altogether.

But there are other factors that matter even more. For Johnson, references from other landlords carry a lot of weight. “Those references are usually more important than having good credit,” he says. “Other landlords will let you know whether they had trouble collecting rent. They’ll also let you know if their former tenant damaged the property, which is probably the most important factor of all.”

O’Connor agrees, saying a record of paying rent on time and treating their apartment well is extremely important to any landlord. “Divorce, medical issues, student loans can all have detrimental effects on a credit score, but in context may be understandable,” he explains.

4. Big picture: Will this applicant work?

Without a doubt, your credit score matters, especially if there are a lot of applications submitted for one apartment. Most landlords will want to investigate your situation further if you have bad credit — and good credit scores make them feel more comfortable renting their apartment to you.

But as noted above, a good credit score is only part of the package. Trulia’s recent survey revealed that landlords want to see customized applications that detail your situation and show you’re eager, engaged, and reliable. In fact, those inquiring with a customized message about properties for rent on Trulia were 20% more likely to hear back from landlords than those inquiring without customizing.

And while a good credit score is ideal, you can still rent with bad credit if you make the effort to show why it was bad and how you recovered from past financial mistakes. This is especially true if you have a strong and steady income, which shows you have the funds coming in to actually make rent, and if you’re co-signing with a roommate or two.

Have you rented an apartment with a low credit score? Share in the comments!