Why Your Rental Credit History Is So Important

When it comes to real estate, your credit history plays a significant role in the type of home you can afford and the type of loan you qualify for. Lenders want to be sure that you have a history of paying on time before they approve you for a mortgage. But what about renting? What part does your credit history play in securing you a rental property? Many renters are surprised to know that landlords take your credit history and your rental history into consideration when considering your rental application. Here is what you need to know about your rental credit history before renting a home.

Your Rental Home Credit History

Your credit history is an in-depth look at the way you handle your finances, how you get into and out of debt, and your spending habits. Traditionally, landlords would look at a tenant’s credit history to get a better idea of how they manage their money and if they prove that they are a good candidate for timely rent payments. If you had a rough season and there are a few mistakes in your credit history, don’t worry. Landlords are more concerned with your overall commitment to paying off debt than a perfect credit score or flawless credit history. Murrieta property management companies, and other property management companies in southern California, look at both your credit and rental history when assisting landlords in screening tenants.

Your Rental Home History

These days, however, landlords are more interested in your history of paying rent than paying off your credit card. If you have a history of late or missed payments, abandoning a lease early or other “bad renter behavior,” these mistakes will follow you and make it harder to find a rental in the future. If this sounds like you, it is essential to be honest and transparent with your future landlord and work to prove yourself as a renter who is willing and able to play by the rules.

Look into your own rental history before you start your rental property search so there are no surprises when your potential landlord looks into your history. You can get a report of your rental history from many of the same sources that you check your credit history, or you can ask your previous landlords for official copies of your rental history. If there are a lot of negative marks on your rental history, check to make sure they are all accurate. If they are not, you can dispute some of the inconsistencies to enhance your history report.  

If your rental history is flawed but accurate, there are a few things you can do to fix it:

• Meet with the landlord who filed the negative report and try to rectify the situation. Pay the damages, accept responsibility, apologize. If you fix things with a previous landlord, you could get the bad mark reduced or removed from your history, which will make things easier moving forward

• Be proactive in cleaning up your record. You may not be able to fix your mistakes from the past, but you can be intentional about how you move forward. Pay on time, take care of the property you are in, establish a positive relationship with your current landlord. All of these things will reflect positively on you and will work in your favor in the future.

• Don’t play the victim. If your rental history is flawed, own it. Be upfront and honest about your financial situation with your potential landlord and come up with action steps that you plan to take to change your past behavior. Some landlords will give you a chance, others won’t. All you can do is be honest and accountable.

The best predictor of future behavior is past behavior, so landlords are looking into the way you handled your responsibility as a renter in the past to determine if you can be a trusted tenant in the future.

What about first-time rental home tenants?

If rental history is so important, what happens when you don’t have a history of renting at all? No worries! Landlords can use other sources to help determine if you are eligible for renting, such as your credit history, income reports, and tax returns to prove that you have the income required to pay the rent each month. Landlords are often willing to work with first-time renters to help them get into a home and start building their rental history.

Landlords often enlist the help of Temecula property management companies (or property management companies in their area) to perform background checks on renters, which often includes looking into rental history. It is an important part of the rental process that both landlords, management companies and tenants take very seriously. A property management company can take the stress out of owning investment property with property management.