Does Renting An Apartment Build Credit?

Reporting rent payments to the credit bureaus can help you build credit and ultimately improve your credit score. If you are consistently paying rent on time and in full, it’s wise to consider adding this to your credit reports.

Does Paying Apartment Rent Build Credit?

On time and in full rent payments appearing on your credit report will help you build credit. However, according to a recent survey by the Urban Institute, less than 5% of tenants report their rent to the credit bureaus.

If your landlord or property management group does not use a rent reporting service, the tenant will then need to take some extra steps to ensure rent payments will build credit.

The good news is there are several services available today to help renters report their rent payments to the credit bureaus.

How Do Rent Payments Affect Your Credit Score?

Reporting your rent payments will help you establish a credit report and a credit score. If you already have a credit history but have had some financial issues in the past, adding on-time rent payments can help your credit recover quickly.

Even in the event you have established a good credit history, adding these rent payments can only improve your score. Your credit could take a hit, however, if you paid rent late or missed the payment, altogether.

Apartment Credit Score FAQ’s

Here are a few of the most commonly asked questions regarding credit checks and apartment rentals.

What Credit Score Do You Need To Rent An Apartment?

As mentioned, a minimum credit score of 650 can greatly increase your chances of approval. Higher scores will be needed in the most competitive rental markets. Landlords and leasing agencies will run credit checks to get a better sense of the renter’s potential tendencies, especially when it comes to paying rent on time.

Each landlord and property management company has the ability to put their own credit check criteria in place. It goes without saying, though, the higher the credit score, the more likely you are to be approved.

How Do Landlords Check Credit Scores?

Landlords will check your credit scores directly through one of the three credit bureaus, including Experian, Equifax, and TransUnion. Property management software platforms can also be utilized for these checks.

Can Multiple Credit Checks Affect My Credit Score?

Since apartment checks are considered soft checks, they will not negatively impact your credit score. Your credit score should not be impacted whatsoever, regardless of how long your apartment search takes.

How Long Do Inquiries Stay On Your Credit Report?

Soft credit pulls can be seen in your rental credit check history, but they won’t affect your score at all. They will disappear within 30 days. Hard inquiry checks, on the other hand, can stay on your report for 2 years.

How Can I Rent An Apartment With Poor Credit Or No Credit?

Here are a few tips to help you rent an apartment with either bad credit or no credit at all:

• Get a cosigner.
• Get a roommate.
• Provide multiple references.
• Build your credit up.
• Pay a larger security deposit.

Does Applying For An Apartment Hurt Your Credit?

One question many tenants have is whether or not apartment credit checks are classified as hard or soft inquiries. Hard credit checks are when your credit report is pulled in order to check your credit history for a new line of credit. Soft checks pull the same information, but they have less of an impact on your score because they are not attached to a specific credit application.

The majority of credit card providers, mortgage lenders, and other lending institutions will run a hard credit check. However, since landlords and property managers primarily check for information on your credit history to determine your ability to make on-time payments, these are recorded as soft checks.

This means your credit score is typically left unchanged when you are applying for an apartment, unless you are applying for a new line of credit at the same time.