Federal and state laws protect renters against many kinds of discrimination. A landlord can’t refuse to rent to you because of your race, gender, national origin, religion or handicap, among other reasons. Prospective tenants with low credit scores, however, do not rate that level of protection, so a low credit score can indeed disqualify you from a property you'd like to rent.
Screening applicants based on their credit scores (with the applicants' permission) is a lawful practice -- it is not discrimination.
The Legalities of Screening Applicants
Landlords are allowed to screen applicants, as long as they use objective criteria and all prospective tenants have to go through the same process. Among the criteria they can use are those designed to determine whether the applicant can afford the property and whether he is a risk to default on the rent. Low credit scores can be considered here, along with income, any negative rental history and references.
Consistent and Objective Standards
While landlords can consider credit scores, they have to use an objective set of standards. In other words, they can’t have one score be the cutoff for one demographic group and a higher cutoff for another. They also have to use the same yardstick to measure every applicant. They can’t decide that a low credit score is a minor factor for male applicants and a deal breaker for women, for example.
Permission for Credit Check Needed
For the landlord to run a credit check on you, you have to agree to it in writing. You may even need to pay a small fee to allow her to pull your credit report. If she runs a credit check without informing you, you have cause for a complaint. However, the landlord can also remove you from the applicant pool for failure to sign the authorization. It’s far better to sign it and be prepared to explain what caused your lower credit score and why you don’t expect it to be a problem in the future.
A Different Scoring Requirement
Your credit score might not be the issue for landlords -- at least, not the score that appears on your credit reports. Companies that screen applicants often create their own proprietary financial scores using the data they feel is more relevant to renting. Your credit score might be fine, but if the negative entries relate to unpaid rent that wound up with a collections agency or utility bills that went unpaid for months, these events might carry more negative weight than a delinquent credit card account.
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