Editorial Policy

What do potential landlords look for in your credit report?

Erica Sandberg

August 15, 2014

QHi Erica,

I am trying to rent an apartment, and got my credit report to show. It is not good. It is full of old bills that I got when I was in the hospital in urgent care. Most are going on four years old now. I don't have a credit card or anything like that. What are the odds that someone will rent to me? I have a good job and enough for first and last and security. –Jeanette

ADear Jeanette,

Property owners and managers often do check the credit files of prospective tenants, so I'm glad you pulled your reports to know what's being listed. In general, they want to see evidence of financial responsibility. A long, steady stream of timely payments will work in your favor, as they would show that you are capable of doing what is most relevant to them: provide a rent check on time, every month.Ask Erica

If the landlord wants evidence that you have made on-time payments, provide other types of bills. Well-handled utility accounts, for example, may suffice.

But how do all those medical debts look to someone who is considering you as a tenant? Bad, but not as horrible as if they were lines of credit that you ran up but failed to pay. You had hospital services that you probably needed but couldn't afford at the time. That's different from consumer debt, which can be construed as shopping gone wild.

You're dealing with humans, and many understand such problems. Some landlords may overlook them completely. If they don't, pay the debts to zero so they are not as much of a factor. Your reports will still indicate that they went to collections, but satisfied liabilities look better than those that are outstanding.

It's good that you have a copy of your own consumer credit report to show when you view a place, but be aware that owners and managers may want to pull their own. They may order specialized reports that also show records of evictions. Assuming you have none of those, you're in a decent position.

Whatever kind of reports they pull on you, they must ask you for written permission beforehand. This will be your cue to explain that the bills (and their almost certain collection activity) were a result of expensive healthcare costs, not careless shopping excursions.

Some good news on your chances: Since you don't have any credit instruments (I presume you don't have loans either), you also don't have the resulting debt. That's great! Landlords assess the amount that you might owe and pay on a monthly basis. If that figure is too large, you probably can't afford the rent. But for you, all the money you earn from your job can go toward rent payments and other necessary expenses.

Even better is that you have the cash upfront to pay for the first and last months' rent, as well as a security deposit. If you really want to sweeten the deal, offer a touch more. It couldn't hurt your odds.

Got a question for Erica? Send her an email.