A landlord running a background check is fundamentally trying to see if you're able to afford the apartment and won't otherwise be a liability to have on the premises. One of the most common elements of a background check is a credit check, and landlords may also check out your rental and employment history. If you've been in trouble with the law or been involved in a landlord-tenant dispute that went to court in the past, you may also be asked about that.
Landlords run background checks to determine an applicant's credit risk and whether or not they've had any encounters with the law.
Landlords Running Background Checks
Often as part of an apartment rental process, you'll be asked to consent to a background check. You may even be asked to pay some or all of the costs of this check.
This is a way for landlords to protect themselves by searching for any red flags in your credit history or history with the law. For instance, a landlord is less likely to want to rent to someone who has had trouble paying bills in the past or has been convicted of a violent crime, since they could stop paying rent or cause trouble for other tenants.
Credit Checks and Landlords
The credit check is normally run based on your files with the big three credit reporting companies, called Equifax, Experian and TransUnion, as well as potentially with some specialized agencies focused on furnishing data about rental history, utility payments and other relevant information. Naturally, landlords prefer to see tenants with an established history of using credit who don't have a tremendous amount of debt relative to their spending limits.
You can check your own credit file to be prepared for a landlord credit check by obtaining free credit reports from the big three credit bureaus. You're entitled to one from each agency once a year, and you can receive additional credit updates through various free and paid online services. If you've ever set up a credit freeze, which you can do to reduce the risk of unauthorized use of your credit history to obtain loans, you may need to lift the freeze to allow the landlord to run a credit check.
If you spot errors on your credit report, contest them with the agency that generated the report. You may need to work with creditors to prove that the information is, in fact, mistaken, but it can be worth taking the time to do so if it'll boost your credit.
Criminal and Civil Court
If you've ever been convicted of a crime, or if you've been taken to court by a previous landlord, be prepared to have his information come out in your background check and have a ready answer for why you would still make a good tenant.
This sort of information in your file can make it harder to find an apartment but shouldn't deter you from your housing search.
Providing Banking and Salary Information
Landlords will sometimes ask you to provide proof that you can afford the rent in terms of how much money you have in the bank and how much money you earn.
Come prepared to a meeting with a potential new landlord by bringing bank statements, pay stubs or other relevant proof of your earnings and net worth. If you're not working or don't have a lot of money in the bank, be prepared to explain why you'll still be able to afford the rent every month.
You may want to redact your Social Security number, bank account information and other sensitive data from your bank statements and other records before sharing them with a potential landlord.
Multiple Tenants on the Lease
If you're looking to move into an apartment with a friend or loved one, some landlords will insist that all tenants' names be on the lease, while others may be satisfied with just one person signing for the group. Make sure you understand what the lease says about your obligations to pay the rent if one of the roommates stops paying for any reason.
If you're not required to have each person in the home on the lease, you may wish to have the person with the best credit fill out the rental application so that you have the best chance of securing the apartment.
Checking Your References
Some landlords will ask for personal or professional references as part of the application process. At the very least, they may ask for a contact number for your employer to verify you actually work where you claim and make the salary you report on your rental application.
If you are going to list somebody as a reference, it is a good idea to clear it with that person before you do so in order to ensure that they will speak highly of you and are happy serving in this role.
Your new landlord may also ask to speak to a previous landlord about your history as a tenant. Naturally, make sure you've told your existing landlord you plan to move out before doing this so that he or she won't first learn of your plans from your potential new landlord.
Bringing a Cosigner
One option if you are concerned about your credit rating or other aspects of your background check is to offer to add a cosigner to your lease. This is often an attractive option for young people, such as students, who don't have lengthy rental or credit histories and can have their parents cosign a lease.
Remember that if you cosign someone's lease, you will be on the hook if they stop paying rent or otherwise break the lease. Only cosign a lease, a loan or any other contract for someone close to you that you trust, or in a situation where you're not afraid to owe money.
Deposits and Fees
As part of the apartment application process, you may be asked to pay a fee for a background check. You may also be required to pay a security deposit, often equal to one month's rent, before you can move in. In some cases, you may need to pay your last month's rent as well or other fees, such as a fee to an apartment broker who helped you locate the place.
Make sure you understand what fees will be required and how much you must pay before you can take possession of the new apartment. Move money into your checking account if you need to, and bring your checkbook to any meetings or tours of potential apartments for you so you're prepared to pay fees quickly.
Do Your Own Diligence
A potential landlord will do a background check on you as a tenant, but you should do your own due diligence on the landlord and apartment to the extent that you can. Search the internet for any information, positive or negative, you can find about the landlord and the building.
Talk to other people in the building if you know any or happen to run into some while touring the place. If you have concerns, search city inspection records or other such files online to look for potential problems.
If something doesn't feel right, and you think the apartment may have issues or even be an outright scam, consider finding another place to rent.
- Avail: 5 Reasons Landlords Must Require Tenant Background Checks
- AnnualCreditReport.com: Home Page
- The Penny Hoarder: The Ultimate Guide to Renting an Apartment When You Have Bad Credit
- NOLO: California Law on Tenant Application Screening Fees and Credit Reports
- Apartment Guide: Should You Cosign an Apartment Lease?
- Money Crashers: How to Screen Potential Tenants – Questions, Credit & Background Check
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Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.