Landlords often use a third-party credit checking company to help determine whether to rent an apartment to a particular tenant. Because your history with managing money is likely to suggest future behavior with paying your rent on time, this screening process helps landlords determine whether you are likely to be a good tenant. A third-party credit check often includes features beyond getting your basic credit report.
Credit History
A third-party credit checker typically pulls up your full credit report from at least one of the three major credit bureaus: TransUnion, Experian and Equifax. This report contains information about your major credit accounts, including credit cards, student loans, auto loans and personal loans. Your report also shows if you have had accounts sent to collection agencies and if you have had court judgments or bankruptcies. Paying your bills on time, applying for credit sparingly and keeping your credit card balances well below their limits are a few behaviors that lead to a good credit report. The credit checker might or might not provide the apartment landlord with your full credit report, but your landlord will at least get a general overview of your credit.
Evictions
Credit checkers typically run searches of state court databases for records of evictions. Because evictions go through the court, they are public records that anyone can access. If you have been evicted from a home or apartment before, this reflects poorly on you as a potential tenant.
Previous Rental History
A third-party company will probably try to check whether you have a history of paying rent on time. One way to do this is by looking up the information in a landlord-reported rental history database. Otherwise, the credit checking company may call the previous landlord you listed on your application and ask how long you lived there and if you consistently paid your rent on time.
Employment
Apartment companies or landlords like to see that an applicant has reliable income to be able to afford the rent. The third-party credit checking company might call the employer you list on a rental application to verify that you are employed and that your annual salary is approximately the amount you listed.
Checking History
You might be able to write a check for rent every month, but if the check bounces, the landlord is out of luck. Banks often report the names of account holders who frequently bounce checks to companies such as ChexSystems that gather provide it to other parties. Therefore, one component of some tenant credit checks is to check whether a tenant is listed as someone whose checking account history is poor.
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