It's pretty common in the USA that landlords want to know your credit history before they let you sign a lease. They want to know how much you make as well as how much debt you have so they can verify your ability to pay rent. Tenants tend to have pretty strong protections in the USA (some states more than others), and the cost of having a bad tenant can easily run into the tens of thousands of dollars.
Sending credit history report to potential landlord
My only concern about your story is that the landlord wants you to submit your credit report to them. Typically the credit report is gotten directly from the credit bureaus, otherwise you could falsify the information and send him a fake. All of the major credit bureaus in the US market their services directly to landlords:
Your landlord might ask for your social security number (or whatever your country's equivalent is). However, services now exist that allow your landlord to get your credit history without handing over your personally identifying information. The landlord just needs your email, then the credit bureau verifies your identity directly and sends your landlord a verified report that does not include your personally identifying information.
Private credit reporting agencies collect and sell credit files and other information about consumers. Many landlords find it essential to check a prospective tenant's credit history with at least one credit reporting agency to see how responsibly the applicant manages money.
Another popular option is to have a service request a credit and screening report from your tenant. Doing so avoids your having to collect a credit check fee (the service charges the applicant) and potentially sensitive information (such as a Social Security number). Most of the time, you simply register an account online with the service, and it will send the applicant instructions for how to order the report and allow you to receive it. The service notifies you when the report is complete and tells you how to access it. Many of the credit bureaus provide this option, as do other landlord-oriented websites such as Cozy and TurboTenant.
State laws might differ, though: For example, Wisconsin forbids landlords from charging for a credit report if, before the landlord asks for a report, the applicant offers one from a consumer reporting agency and the report is less than 30 days old. (Wis. Stat. 704.085(1)(b) (2019).) Consider consulting a local landlord-tenant attorney to find out your state's laws regarding tenant screening and credit checks.
Credit scores and credit reports are just part of the rental equation. Not all landlords and property managers look at credit scores. And factors other than your credit reports and scores could still help you qualify for an apartment.
Landlords want to make sure potential tenants have enough income to handle rent payments, so they might verify employment. And according to the Consumer Financial Protection Bureau, landlords and property managers might do a background check using a tenant-screening agency. Both employment verification and background checks can be important factors in whether an applicant is approved.
Your CreditWise score is calculated using the TransUnion VantageScore 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.
Among everything that a landlord has to do, however, it is arguable that the most important thing of all is how they handle tenant screening, including credit reports. Having the right tenants at your property can make or break your profit line, and that is why landlords are always looking for ways to streamline their search process.
Being informed about how a credit report for a tenant sent to a landlord can and cannot be used is important. Accidentally using this data incorrectly could lead to an expensive lawsuit, so take a few minutes to review the information gathered here today.
Each of these agencies has different information that they provide in their credit reports. This is because of differences in policy as well as the information that is collected by each of these bureaus. Because of this, landlords often stick to one of these agencies to keep their results on a consistent baseline.
Obtaining legal credit information for these types of services is often preferable to landlords because you are given a clear-cut, decision-focused report that highlights the things that matter most to landlords. In many cases, you can even request specific information to be highlighted.
With this information, you can use a service such as the TransUnion Full Credit Report, formerly known as SmartMove, is a full credit report to unlock their credit history, address history, and more. The tenant will need to sign in to complete this process, but you will get a comprehensive report.
If you are a prospective tenant and are curious about what report a landlord will see, you can ask them what screening service or consumer reporting agency they are using to get a report. In most cases, you can get a copy of all information that has been given out about you for free.
If you want to check your credit completely separate from any specific application or landlord, you can visit the Experian website to get a free credit report or credit score. While the information in the free report might not cover the exact same things as most tenant screening services, you would get a good idea of what a landlord might see.
Using tenant screening services to obtain tenant credit reports for landlords can be a very smart choice, but you need to be sure the services give you the right information. Take care to choose a service that will make it simple to:
State law may give a tenant the right to receive notice when the landlord wants to enter the space or send someone to make repairs. As a renter, you probably don't want your landlord to have unlimited access to your space. For instance, your landlord will most likely try to rent to someone else when you decide to move out. However, you will not want either the landlord or potential renters knocking on your door at all hours of the day or night.
Rental applications reveal information that allows a landlord to make preliminary judgments about your suitability as a tenant. A potential landlord may verify application information regarding your current employer, income, and living situation (including opinions of your current landlord). A credit check, on the other hand, provides the landlord with information that is only available from a credit history report, with negative information dating back seven years or ten years in the case of a bankruptcy.
Do late rent payments show up on my credit report? Maybe. According to the national credit bureau, Experian, late rent payments are not generally a part of your credit history unless the landlord or management company is a subscriber to the credit bureau. However, Experian advises that late payments may be revealed if the landlord refers the matter to a collection agency or if a civil court action, the first step toward eviction, is filed against you.
Will an eviction show up on my credit report? It will not, according to national credit bureau Experian. However, Experian's site states that if the eviction resulted from nonpayment of rent, your credit report may show a collection action or a civil court judgment awarded to the landlord.
While eviction is not normally a line item in your credit report, landlords may gather information about you from other sources. As discussed in depth in Section 4, prospective landlords may conduct more extensive checks that reveal information about your character, general reputation, personal characteristics or mode of living. Therefore, a potential landlord may learn of your eviction from a prior residence when a consumer reporting agency contacts references or previous landlords.
How is a tenant report different from a credit report? Your credit report includes information about creditworthiness, such as your record of paying bills on time. In addition, your credit report gives landlords an indication of whether past credit problems have ended in a bankruptcy or a state civil court proceeding for non-payment of rent, an action that usually leads to eviction.
A tenant report, on the other hand, may include not only credit information but such things as employment and criminal history, entries on sex offender or other public databases, driving records, and more. A tenant report may also include information gathered from personal interviews with your neighbors, former landlords, or associates.
However, many different companies are in the business of tenant screening. If the landlord does not tell you the name of the company he or she plans to use, you should ask. If you do not ask questions when a prospective landlord mentions screening, you may be screened without knowing the name of the company. This makes it more difficult to correct potential errors.
In California, you have the right to request a copy of your report for at least two years after the consumer reporting agency provides your report to the landlord (or anyone else requesting the report). (Cal. Civ. Code 1786.11) In addition, California law requires that you receive information about the tenant screening company before the landlord orders your report.
However, the FCRA does cover screening companies, and tenant screening reports often include information compiled from landlord-tenant actions in local court. This means when a third-party screening company creates a report that includes landlord-tenant court records, you have the same rights under the FCRA as you do when a landlord checks your credit report. 2ff7e9595c
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