What a Tenant Credit Check Can Mean to You

For most landlords, tenant credit check paperwork is not a simple formality.  This information is checked with credit reporting agencies and the landlords make decisions based on what they find out.  It is important to know what a tenant credit check can mean to you. 

A tenant credit check will most likely be carried out by a company that is contracted to provide this service.  The company will go to credit reporting agencies like Equifax and Experian for information.  This allows the landlord to get the data from the credit reporting agency more quickly. 

The company will also help the landlord to clearly understand the detailed information on the tenant credit check.  Companies like this deal in volume.  They may charge only $10 or so for a tenant credit check.  The landlord may make this a part of an application fee, which may cover other costs as well. 

Landlords are legally able to use a tenant credit check to take action against a prospective tenant.  If the tenant credit check comes back with a bad credit history, the landlord is allowed to charge the person more to rent the same apartment, condo, or house a higher rate.  If the history if good, the rental unit remains at the customary price. 

A bad tenant credit check can lead to other consequences.  The landlord may ask for a co-signer.  This means that you will be beholden to someone else for your place to live.  If you are an independent sort, this will rub you the wrong way.  It can also lead to hostilities between you and a person you have relied upon, as that person may feel compelled to constantly intervene to make sure you pay your rent. 

It may not seem fair, but a landlord may demand an extra deposit if your tenant credit check comes back negative.  It may be a larger deposit instead, but the effect is the same.  You have to come up with more money to get into the rental unit.  However, this is perfectly legal for the landlord to do, according to the Fair Credit Reporting Act of 2002. 

Also because of this act, your landlord is required to address the reason your tenant credit check kept you from being able to rent the home, or at least to rent it under a normal contract.  You are being treated unfairly if you do not receive a letter stating the reasons you were singled out. 

The Fair Credit Reporting Act will be quoted and specific problem areas will be listed in the letter.  Also noted will be which agency or agencies your tenant credit check was run through.  You will be given a small amount of information on how to dispute these results.  At that point, your tenant credit check will be complete. 

If you have a tenant credit check that comes out badly, it can cause aggravation and loss of money.  However, if it comes out well, you should be moving in, in no time.