What is a Credit Report and Credit Score?
A credit report is a document that lists a person's debts and history of borrowing and repayment. A credit score is a measure of the person's overall creditworthiness. A credit report and/or score are used by a landlord to judge a tenant's financial reliability in making monthly payments. Therefore, having a good credit report and score is very important in securing a property.
What if I don't have a credit score?
A credit report and credit score are established by incurring and repaying debt. For example, opening a credit card account, buying a car, or receiving a student loan are all ways to start building your credit history.
Find an independently-owned property. Most real estate agencies will judge you heavily on your credit score. Independent owners are often more flexible.
Because many students do not have any credit accounts (e.g. credit cards, mortgages, loans), they do not yet have a credit history or credit score. In this case, you should consider preparing a Renter's Resume and Supplemental Packet to optimize your chance of securing a property.
Landlords & Credit Reports
Landlords will often want to view your credit report and/or credit score as part of the application process.
By federal law, you are entitled to one free credit report from each of the three major credit bureaus each year. A good strategy is to bring copies of that free credit report when viewing properties, so that you are prepared to give it to landlord with the rental application. For more information on free credit reports, go to reviews.com, www.ftc.gov, or www.annualcreditreport.com.
Some landlords prefer to collect a fee from you for the purchase of the credit report. California law stipulates that landlords can collect a maximum fee of $30 for a credit report. The landlord must also provide a receipt that itemizes how the money is spent on the report, give the applicant a copy of the credit report if requested, refund any unspent portion of the fee, and return the entire fee is a background check is not performed.
Before agreeing to pay a credit report fee, you should ask the following questions:
- Will the fee be applied to the first month's rent if your credit is positive and the landlord selects you as a tenant?
- Will the fee be returned to you if the credit is positive but the landlord rents to somebody else?
- How long will the process take to check your the credit report?
- Is your fee refundable if the credit check takes too long and you are forced to rent another place?
If you decide to pay the credit report fee, any terms regarding a refund or credit should be in writing. This will help avoid any potential disagreement with the landlord about a refund.
Without a U.S. Social Security Number it is impossible to obtain a credit report from a U.S. credit bureau. Many landlords may be adverse to accepting tenants who cannot provide a U.S. credit report. Therefore, international students are advised to prepare additional documentation of financial resources (scholarships, bank account funds, etc.) as part of a Supplemental Packet.
Need a cosigner?
You can have a parent or guardian cosign on your lease. That means that if you are unable to make your monthly payments, your cosigner would be financially responsible. Having a cosigner is a favorable indication to the landlord that you are reliable as a potential tenant.
The International Student and Scholar Services Office (ISSS) may be able to assist you by providing a letter of support stating that USF verifies that you have access to sufficient financial resources to pay your tuition and living expenses. To request such a letter, contact the International Student and Scholar Services Office at firstname.lastname@example.org.
Refusal to Rent
A landlord will usually not give you a reason for refusing to rent to you. However, if the landlord tells you that the decision is based on a negative report from a credit bureau or credit reporting agency, ask the landlord to give you the name of the credit bureau so that you may check the accuracy of the report and correct any possible errors.
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