Why It Matters
When you run a credit check, you pull a report from one or more of the three major credit bureaus — Equifax, Experian, or TransUnion — and review the applicant's payment history, outstanding debts, collections, and credit score. Most landlords set a minimum score threshold, commonly 620 or higher for standard rentals, though requirements vary by market and property class. A credit check is one component of a broader tenant screening process that also includes income verification and rental history. It gives you a data-driven signal about financial behavior that a face-to-face interview simply cannot. Used consistently, it reduces the risk of late payments and costly evictions.
At a Glance
- Pulls a credit report from Equifax, Experian, or TransUnion
- Shows payment history, open accounts, collections, and bankruptcies
- Most landlords require a minimum score of 580–700 depending on property type
- Fair Credit Reporting Act (FCRA) governs how you use and share this data
- Must be run with written consent from the applicant
How It Works
Obtaining the report requires a compliant, written authorization from the applicant before you pull anything. You collect this consent on your rental application or a standalone disclosure form. Once you have authorization, you access the applicant's credit file through a tenant screening service — platforms like TransUnion SmartMove, Cozy, or RentSpree pull the report on your behalf and often charge the applicant directly, which simplifies your workflow and compliance obligations.
The report itself contains several layers of information beyond just the score. The score — typically a FICO or VantageScore between 300 and 850 — is a quick summary, but the underlying data is where the real signal lives. You'll see whether the applicant has a history of on-time payments, how much revolving debt they carry relative to their credit limits, whether any accounts have gone to collections, and whether they have a bankruptcy on record. A 640 score with one old medical collection reads very differently from a 640 score with three recent missed car payments.
Setting consistent, written criteria before you start reviewing applications is both a legal best practice and a fair housing safeguard. Decide in advance what your minimum score threshold is, how you'll handle borderline applicants (co-signers, larger deposits), and what automatic disqualifiers look like. Document these criteria and apply them uniformly to every applicant. This protects you under the FCRA and fair housing laws, and it makes your decisions defensible if a rejected applicant ever challenges them.
Real-World Example
Tamika owns a three-unit building in Columbus and receives four applications for a vacant two-bedroom unit at $1,400 per month. Her stated policy requires a minimum credit score of 620, a debt-to-income ratio below 40%, and no active collections over $500. She runs credit checks on all four applicants through SmartMove. One applicant scores 710 with a clean payment history — clear pass. A second applicant scores 595 with two recent missed payments — clear decline. The third applicant scores 638 but has a $900 medical collection from 2022; Tamika's written criteria allow her to approve borderline applicants with a co-signer or an additional month's security deposit. She offers that option, the applicant accepts, and the unit is filled. The fourth applicant withdraws before she completes the review. By applying the same written criteria to all four, Tamika fills the vacancy quickly and keeps her process legally defensible.
Pros & Cons
- Identifies applicants with a documented history of paying obligations on time
- Reduces the likelihood of chronic late payments and eventual eviction proceedings
- Creates an objective, documented basis for approval or denial decisions
- Helps you compare multiple applicants on consistent financial criteria
- Can surface red flags — active collections, recent bankruptcy — before they become your problem
- Credit scores don't capture the full picture — a low score can result from medical debt or a past hardship unrelated to rent behavior
- Running checks through a bureau or service carries a small cost, typically $25–$50 per applicant
- Applicants with thin credit files (young renters, recent immigrants) may score poorly despite being reliable payers
- Mishandling the report or sharing it improperly exposes you to FCRA liability
- A single score threshold, applied rigidly, can inadvertently screen out otherwise qualified applicants
Watch Out
Never skip the written consent step, even if the applicant seems clearly qualified. Pulling a credit report without FCRA-compliant authorization exposes you to federal liability, and "they said it was fine verbally" is not a defense. Use a written authorization form every time, keep a copy in the applicant's file, and never share the report with anyone outside the leasing decision.
Be careful about how you communicate denials based on credit. Under the FCRA's adverse action rules, if you deny or conditionally approve an applicant based on credit information, you must provide an adverse action notice that names the credit bureau used, gives the applicant's score and the range, and explains their right to a free copy of the report. Skipping this step — even accidentally — is a FCRA violation.
A credit check works best when it's part of a layered screening process, not a standalone gate. Pair it with a background check and criminal history check, confirm income through employment verification, and contact at least one previous landlord for a landlord reference. A 720 credit score paired with a fabricated pay stub and a landlord who says "I'd never rent to them again" is a far worse tenant than a 640 score backed by three years of clean rental history and verifiable W-2 income.
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The Takeaway
A credit check is one of the most reliable data points you have when evaluating a rental applicant, but it's a tool, not a verdict. Use it as part of a complete screening framework, set your criteria in writing before you start reviewing applications, follow FCRA procedures on consent and adverse action notices, and you'll make better leasing decisions with less legal exposure.