Question: I have been searching for apartments and each one is asking for a separate application with a credit check as well. Thus far, I have applied for three and am worried about how this may affect my credit. Will these credit checks lower my credit score?

Answer: The answer to that question depends on your landlord. Two types of credit checks exist – hard and soft – and the choice your potential landlord makes will determine if your application for that new apartment lowers the score on your credit report.

Hard Credit Checks for Rental Agreements

If you’re completing an application for that new apartment and the rental management company requests your permission to run a credit check as part of the process, it is important to know whether or not it will be a hard credit check. These types of credit checks indicate to reporting bureaus that you are possibly going to be in debt, in this case for a lease agreement. This makes you an increased financial risk, and it can lower your credit score.

When hard credit checks are run, they typically only lower your overall credit rating by five points or less. The good news is that these hard credit checks only remain your credit report for two years, and only usually affect your credit rating for twelve months.

Soft Credit Checks for Rental Agreements

Some landlords only perform soft credit checks as part of the screening process for your lease agreement. These credit checks can be seen on your credit report, but they do not negatively impact your credit rating. The inquiry will only show who pulled your credit history and the date that it was pulled.

Protecting Credit Ratings while Renting

If you are concerned about your credit score as you search and apply for that new apartment, there are several steps you can take to help protect your credit history and still get you that new place to call home.

  • Check your credit history before applying for the apartment. If you see that your credit history is relatively positive, it increases the chances that you will be able to secure a lease agreement. Those five points you might lose as the result of a hard credit check should not be detrimental to your future – they will only last for twelve months, which is about the time-frame of a rental agreement.
  • If you find negative reports on your credit history, do whatever you can to rectify the situations before making any more applications for borrowing purposes.
  • Inquire with potential landlords as to what type of credit check they will be running as part of the application process. Some landlords will agree to use your own credit report, as long as it is current and complete. When you make an inquiry on your own to see your credit report it is only considered a soft credit check and it will not lower your credit score.

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.