Q:

What do landlords look for in a credit check?

A:

Quick Answer

When checking a potential tenant's credit, landlords look at the tenant's debt, payment history and rental history. Landlords use this information to approve or reject rental applications. A landlord may also run a criminal background check to look for past convictions or arrests.

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Full Answer

The amount of debt tenants have is important because it can dramatically reduce the amount of money tenants have to pay rent. A person with good credit and an income sufficient to meet requirements may receive a rejection if his debt is too great.

Reviewing potential tenants' payment histories allows landlords to gauge how reliable those tenants are in financial matters. Even though credit card payments are not related to housing, a person who makes late payments or fails to pay credit card bills entirely is less likely to pay rent on time each month. Landlords also look for bankruptcies in the credit report. As with all items in a credit report, these remain on the credit report for 10 years.

A tenant's rental history is especially important because it shows the tenant's reliability in paying rent directly. Landlords are looking for tenants with the ability to pay on time each month. An eviction in a rental history is especially harmful for those submitting credit applications.

No credit or rental history may also be harmful to applicants because landlords prefer to rent to tenants who have proven that they are reliable and responsible.

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