Understanding Tenant Credit Reports: A Beginner’s Guide

When reviewing rental applications, credit reports are one of the most important tools in your toolkit. But for many landlords, they can be intimidating at first glance. Here’s a simple breakdown to help you read and understand a tenant’s credit report.

What’s in a Credit Report?

• Credit Score: A three-digit number that summarizes a person’s creditworthiness. Higher is better.

• Payment History: Shows if they pay bills on time.

• Credit Usage: How much of their credit limit they’re using.

• Accounts in Good Standing or Delinquent

• Public Records: Bankruptcies, liens, or judgments.

Red Flags to Watch For

• Recent late payments

• High credit utilization (over 30%)

• Collections or charge-offs

• No credit history at all

What Score Is Good Enough? While there’s no universal answer, many landlords prefer a score of 700 or higher. However, context matters. A lower score with stable income and no evictions may still be acceptable.

Bottom line: A credit report offers powerful insight into a tenant's financial habits. Use it to make smarter, data-driven leasing decisions.