Do rental background checks hurt my credit?

A rental background check doesn’t automatically hurt your credit score.

The important question is whether the screening includes a credit inquiry and, if it does, whether that inquiry is soft or hard.

A soft inquiry doesn’t affect your credit score. A hard inquiry can affect it.

And some parts of a rental background check, such as checking court or rental history information, aren’t credit inquiries at all.

Here’s how to tell the difference.

Does a background check affect your credit score?

Not necessarily.

“Background check” is a broad term. A tenant background check, also called a tenant screening report, can contain different types of information about you.

Depending on the screening report, that can include:

• Identity information

• Credit history

• Rental history

• Eviction records

• Criminal records

• Income or employment information

A background check therefore isn’t the same thing as a credit check.

Checking information such as court records doesn’t itself lower your credit score. The credit score question arises when the screening process accesses your credit file.

Tenant background checks prepared by consumer reporting agencies for housing decisions are consumer reports covered by the federal Fair Credit Reporting Act.

Does a rental credit check hurt your credit score?

It depends on the type of credit inquiry.

Credit inquiries generally fall into two categories: soft inquiries and hard inquiries.

Soft credit inquiry

A soft inquiry doesn’t affect your credit score.

Soft inquiries can include checking your own credit report, reviews of existing accounts and certain other reviews of a credit file.

Soft inquiries aren’t visible to other companies when they purchase your credit report, although you can see them when reviewing your own report.

Hard credit inquiry

A hard inquiry can affect your credit score.

Hard inquiries are commonly associated with applying for new credit, such as a credit card, auto loan or mortgage. Credit scoring models can consider how recently and frequently you’ve applied for credit.

A rental application can also involve a hard credit inquiry. So don’t assume that every rental credit check is soft or every rental credit check is hard.

If you’re concerned about your score, ask which type of inquiry will be used before authorizing the check.

Background check vs. credit check: what’s the difference?

The terms are easy to mix up, but they aren’t interchangeable.

A background check is the broader screening process. It may bring together information from several sources to help a housing provider evaluate an application.

A credit check specifically involves accessing credit information.

A tenant screening report can include credit information alongside other information, such as rental or eviction history. It can also be based on information from several different sources.

That means the question “Does a background check lower my credit score?” doesn’t quite tell you enough.

The better question is:

Will this rental application result in a hard inquiry on my credit report?

If the answer is no, the screening shouldn’t lower your score simply because other background information is being checked.

Will a soft credit check lower my credit score?

No.

Soft inquiries don’t affect your credit score.

So if your rental screening uses a soft credit inquiry, the inquiry itself won’t lower your score.

You may still see the soft inquiry when reviewing your own credit report. Seeing an inquiry listed doesn’t necessarily mean your score was affected.

Rentell uses only a soft credit check. Getting your Rentell Report does not create a hard inquiry, and the credit check itself does not lower your credit score.

Will a hard credit check lower my credit score?

It can.

Hard inquiries can affect your credit score because credit scoring models can consider how recently and how frequently you’ve applied for credit.

The exact effect isn’t the same for everyone. Your score depends on the scoring model and the rest of the information in your credit file.

So it isn’t accurate to say that a hard inquiry will lower everyone’s score by a particular number of points.

Will applying to multiple rentals hurt my credit?

That depends on how the credit checks are performed.

If the applications result only in soft inquiries, those inquiries won’t affect your credit score.

If an application results in a hard inquiry, that inquiry can affect your score.

Don’t assume that the rate-shopping treatment you may have heard about for mortgages or auto loans automatically applies to rental applications. Credit scoring models can treat certain types of loan inquiries differently from other hard inquiries.

If you’re applying to several homes, ask each housing provider whether its screening creates a hard or soft credit inquiry.

Can I check my own credit without hurting my score?

Yes.

Requesting and reviewing your own credit report is a soft inquiry and doesn’t affect your credit score.

Checking your own information can also help you identify errors before you apply for a home.

What about the rest of a rental background check?

A rental background check can include information that isn’t part of your credit file.

For example, tenant screening reports can contain rental history, housing court records, criminal records, employment or income information and identity information.

Looking up those records doesn’t itself create a credit inquiry.

The distinction is simple:

Background information being checked doesn’t inherently affect your credit score.

Accessing your credit file may create an inquiry, and whether that inquiry affects your score depends on whether it’s soft or hard.

What if something in your tenant screening report is wrong?

Tenant background checks prepared by consumer reporting agencies for housing decisions are covered by the Fair Credit Reporting Act.

If information in your report is inaccurate or incomplete, you have the right to dispute it.

That can include problems with credit information as well as other information in a tenant screening report.

How does this work with Rentell and portable tenant screening reports in Colorado?

Rentell uses only a soft credit check, so getting your Rentell Report does not create a hard inquiry or lower your credit score because of the credit check.

Rentell provides portable tenant screening reports, or PTSRs, for Colorado renters. A qualifying report can include credit and rental history along with other required screening information.

Colorado generally requires a landlord to accept a qualifying PTSR and prohibits charging the renter an application fee or a fee to access or use that report, subject to a statutory exception.

Acceptance of a portable tenant screening report isn’t the same as approval of the rental application. A housing provider can still apply its disclosed rental criteria when considering your application.

Before you authorize a rental screening

If you’re concerned about your credit score, ask one specific question before authorizing a rental credit check:

“Will this create a hard or soft inquiry on my credit report?”

That gets to the part of the screening process that actually matters for your score.

You can also review your own credit report without hurting your score and check the screening information you’re providing for accuracy.

In short: does a background check hurt your credit?

A background check doesn’t automatically hurt your credit score.

If a rental background check doesn’t access your credit file, there isn’t a credit inquiry to affect your score.

If it uses a soft credit inquiry, your credit score isn’t affected. Rentell uses only a soft credit check, so getting your Rentell Report does not create a hard inquiry or lower your credit score because of the credit check.

If a rental screening uses a hard credit inquiry, your credit score can be affected.

So when you’re applying for a home, don’t just ask whether there’s a “background check.” Ask whether the screening includes a credit check and whether that credit check is soft or hard.

That distinction gives you the clearest answer to what will actually happen to your credit.