Thursday, November 1, 2012

How Landlords Pull Your Credit Reports and Scores

If you've ever rented an apartment, you know that that landlords pull your credit reports and scores before approving your application. Just like a bank or a credit card company, your landlord wants verification that you can be trusted to make payments on time. Not all landlords want the same information. Some will rent to you based on your credit scores alone without ever laying eyes on your credit report. Others aren't interested in your score, and merely want to review your credit reports to ensure that no previous landlord had to evict you in the past (yes, an eviction can show up on your credit report). But how, exactly, does a landlord pull your credit reports?

How Corporate Landlords Pull Credit Reports

Corporate landlords receive credit discounts.
You may be surprised to learn that a large number of apartment complexes in your area are owned by the same company. A large, sprawling metropolis of rental properties has greater need of a convenient way to pull applicants' credit reports. Think of it this way: if they're fielding a large number of rental applications per day, they need a fast, effective way of obtaining each applicant's credit history.

Large companies have the option of setting up a contract with the credit bureaus that allows the company to pull your credit reports directly from the source. Not all apartment complexes, however, even the truly massive ones, go this route. For a business, ordering credit reports directly from the credit bureaus is incredibly pricey – far beyond your measly $25 application fee. Corporate landlords can afford this because they receive volume discounts. The more credit reports they pull, the cheaper the cost per report.

How the Average Landlord Pulls Your Credit  Report

Some landlords pull credit through other companies.
The average apartment complex does not order enough credit reports on a regular basis to make ordering from the credit bureaus cost effective. These companies often opt to set up accounts with third-party credit providers. These third-party companies have the same deal with the credit bureaus that corporate landlords have, but because they pull a large volume of credit reports on a daily basis, their cost per report is low. By charging subscribing landlords a fee that is reasonable but exceeds the cost per report, the third-party provider makes a profit and the apartment complex gets a copy of your credit history much cheaper than it would have had it ordered the report directly from the credit bureaus.

How Private Landlords Pull Your Credit Report

The majority of rental homes are run by a property management company rather than the property owner.
Private landlords may not pull credit.
The property management company acts as the landlord; taking on the task of screening and selecting applicants, collecting the rent and scheduling the maintenance. Occasionally, however, you'll still find owners that choose to bypass property managers in lieu of handling landlord responsibilities themselves.

It isn't uncommon for a private landlord to avoid pulling your credit report and scores altogether. Even those who know how beneficial a credit history can be when making rental decisions often forego pulling the report for a variety of reasons such as:

  • They don't know how
  • The cost just isn't worth it. 
  • They're afraid of violating privacy laws
  • They don't know how to read and interpret a credit report

This makes the private landlord an ideal choice if you've had credit trouble in the past and might have trouble getting your application approved by a corporate landlord or property management company. 

Before you allow a landlord to pull your credit report, however, its important that you pull your own to find out where you stand in your hunt for rental housing. The federal government allows you three free credit reports each year: one from each credit bureau. Take advantage of that ability and avoid the nervousness of the approval process by pulling your own credit reports and scores before your landlord does.

Related Posts:

How to Get a Free Credit Report Without a Credit Card

Do Apartment Credit Checks Hurt Your Credit Score?

Improving Credit Scores After Collections


  1. Its Great Topics ABout Screening
    Here is the language she used:"Tenant shall pay to Landlord a pet deposit of five hundred dollars,
    zero dollars of which shall be non-refundable"
    Credit checks
    Landlord credit checks
    Landlord background checks