Why do landlords require a credit check before renting

Last updated 2026-07-26

Why do landlords require a credit check?

A credit check gives a landlord a fast, standardized look at how someone has handled debt in the past. That includes credit card balances, loan payments, collections accounts, bankruptcies, and sometimes prior evictions if they've been reported to a collections agency or court record aggregator. For a landlord renting out one unit or ten, that report is often the cheapest, quickest risk signal available before handing over keys to a $2,000-a-month asset. The logic is straightforward. Someone who has consistently missed credit card payments or has $30,000 in collections is statistically more likely to struggle with rent than someone with a clean payment history. Landlords aren't trying to find perfect people. They're trying to avoid a tenant who can't pay and then has to be evicted, which costs money, time, and often several months of lost rent even in a fast eviction state. Credit checks also catch things a landlord can't ask about directly, like prior bankruptcies (which stay on a report for up to 10 years under the Fair Credit Reporting Act for Chapter 7 filings) ^[1]. That single data point tells a landlord a lot about financial resilience during a job loss or medical emergency, which is exactly the kind of event that leads to missed rent. None of this means a low score is an automatic denial. Plenty of landlords look at the whole picture: income relative to rent, rental history, and whether the negative marks are old medical debt versus recent missed rent payments. A thin file (someone young, or new to the US) is a different problem than a bad file, and smart landlords treat them differently.

What is landlording, exactly?

Landlording is the practical, ongoing work of owning and managing rental property: screening tenants, collecting rent, handling repairs, following local and state law, and keeping the property legally rentable. It's a mix of paperwork, maintenance, and people management, more than cashing rent checks. Many cities now require landlords to register or license rental units before they can legally lease them out, and some require periodic inspections tied to that license. If you're new to this and unsure what your city expects, it's worth checking with your local rental licensing office directly, since requirements, fees, and renewal timelines vary block to block in some metro areas. Credit and tenant screening is one piece of landlording, but it sits inside a bigger set of duties: habitability standards, security deposit handling rules (which vary by state, some cap deposits at one or two months' rent), notice requirements before entry or termination, and fair housing compliance under the Fair Housing Act ^[2].

What is a landlord?

A landlord is the person or entity that owns rental property and leases it to a tenant in exchange for rent, taking on legal responsibilities for habitability, repairs, and following state and local landlord-tenant law. The landlord can be an individual owner, a couple, an LLC, or a property management company acting on an owner's behalf. Legally, the landlord role comes with real obligations. Under most state laws, a landlord has to keep the unit in a livable condition (working plumbing, heat, structural safety), provide proper notice before entering, and follow specific rules for evictions. HUD's Fair Housing Act rules also apply to advertising, screening, and denial decisions, meaning credit and background checks have to be applied consistently across applicants, not selectively based on protected characteristics like race, familial status, or national origin ^[2]. If you're a small landlord with one to ten units, you carry the same legal duties as a large management company, just without the in-house legal team. That's exactly where a lot of first-time mistakes happen, especially around screening criteria and security deposit handling.

How to become a landlord (the basic steps)

Becoming a landlord starts with buying or already owning rental property, then legally preparing it for tenants: getting it up to local code, registering or licensing it if your city requires that, setting a fair market rent, and building a screening process before you ever list the unit. Here's roughly the order most first-time landlords go through: 1. Confirm the property meets local building and safety codes, and check whether your city requires a rental license or registration before you can lease it out. 2. Get landlord insurance (different from a standard homeowner's policy) and understand your state's security deposit and notice laws. 3. Set rent based on comparable local listings, more than what covers your mortgage. 4. Build a screening process: application, credit check, background check, income verification, and rental history/reference calls. 5. Draft a lease that matches your state's required disclosures (lead paint disclosure for pre-1978 housing is federally required under 40 CFR Part 745) ^[3]. 6. Schedule any required move-in inspection and document the unit's condition with photos or video. Skipping step one is the most common expensive mistake. Cities like Los Angeles, Chicago, and Baltimore all have rental registration or licensing systems, and renting without a required license can mean fines or even being barred from collecting rent until you comply. If you're unsure whether your city requires this, confirm with your city rental licensing office before you list the unit.

How to be a landlord day to day

Being a landlord day to day is mostly maintenance requests, rent collection, and staying on top of paperwork deadlines, not glamorous work. The people who do it well treat it like a small business, not a side hobby. The recurring tasks: responding to repair requests promptly (many states require "reasonable time," some define it more specifically, like 24 hours for no heat in winter), keeping records of rent payments, handling lease renewals, and staying current on any city rental license renewal deadlines, which often come with their own inspection cycle. Good landlords also keep a paper trail. If a tenant disputes a repair, a security deposit deduction, or a notice period, the landlord's records (photos, texts, emails, receipts) are what holds up in a dispute or small claims case. A one-unit landlord who treats this loosely is the one who loses in court over a $500 deposit dispute that could've been avoided with a move-in checklist and photos.

Why do landlords require renters insurance?

Landlords require renters insurance mainly to protect themselves from liability, not to protect the tenant's belongings, though that's a side benefit. If a tenant's negligence causes a fire, water damage, or an injury to a guest, renters insurance covers the tenant's liability instead of that claim landing entirely on the landlord's property insurance. A standard landlord insurance policy covers the building structure, not a tenant's personal property, and it typically doesn't cover a tenant's liability for damage they cause. Renters insurance closes that gap. It's also cheap: the average cost is around $15 to $30 a month depending on coverage and location, which is a small ask compared to the risk it offloads. Many landlords now require proof of renters insurance as a lease condition, similar to how many mortgage lenders require homeowners insurance. It's become close to standard practice in multi-unit buildings and increasingly common for single-family rentals too.

How much notice does a landlord have to give?

Notice requirements depend entirely on state law and the type of notice (entry, rent increase, lease termination, or eviction), so there's no single national number. Most states require 24 to 48 hours notice before a non-emergency entry, though a handful don't set a specific number by statute. For lease termination or rent increases on month-to-month tenancies, many states require 30 days notice, but some require 60 or even 90 days depending on how long the tenant has lived there or local rent control ordinances. California, for example, requires 60 days notice to terminate a month-to-month tenancy if the tenant has lived there a year or more, and 30 days if less than a year, under California Civil Code Section 1946.1 ^[4]. Eviction notices (pay-or-quit, cure-or-quit) have their own separate timelines set by state statute, often 3 to 14 days depending on the state and the reason. Because these numbers vary so much and change with local ordinances, always confirm the specific notice period against your state's current landlord-tenant statute, not a generic online chart.

What can a landlord look at during an inspection?

During a routine or move-in/move-out inspection, a landlord can generally check the general condition and safety of the unit: walls, floors, plumbing fixtures, smoke detectors, appliances if provided, signs of pest infestation, and whether the unit matches the condition documented at move-in. What a landlord can't do is search through a tenant's personal belongings, closets, or drawers without cause, and in most states, inspections still require the same advance notice as any other non-emergency entry. City-mandated rental license inspections are different from a landlord's own routine inspection. Those are usually done by a city inspector checking for code compliance: working smoke and carbon monoxide detectors, functioning heat, no exposed wiring, proper egress from bedrooms, and no obvious health hazards like mold or pest infestation. These inspections often happen on a set renewal cycle (annually, biannually, or every few years depending on the city) tied to the rental license itself. If you're prepping for one of these city inspections, most inspectors are checking a fairly standard list: functioning detectors, no active leaks, safe electrical, and clear exits. Being ready before the inspector shows up saves a reinspection trip and, in some cities, a reinspection fee. This is the exact gap our $79 City Rental License & Inspection Prep Packet is built to close: a checklist matched to what most municipal inspectors actually look for, so you're not guessing the night before.

Who is responsible for a rental property walk-through inspection in California?

In California, the landlord is responsible for offering an initial walk-through inspection before the tenant moves out, if the tenant requests it, under California Civil Code Section 1950.5(f). This pre-move-out inspection lets the tenant fix any issues themselves before the landlord makes deductions from the security deposit. The statute requires the landlord to give the tenant at least 48 hours written notice of the date and time of the inspection ^[5]. After the walk-through, the landlord has to give the tenant an itemized list of anything that needs to be fixed or cleaned to avoid a deduction, along with an opportunity to address it before the final move-out. At actual move-out, California Civil Code Section 1950.5 requires the landlord to return the security deposit (or an itemized statement of deductions) within 21 days ^[5]. This is one of the more tenant-protective deposit statutes in the country, and it's worth reading directly if you're a California landlord, since the deduction rules are specific about what counts as normal wear and tear versus damage.

What rights do tenants have without a lease?

A tenant without a written lease still has legal rights, usually as a month-to-month tenant under state law, including the right to proper notice before eviction, a habitable living space, and protection from illegal lockouts or utility shutoffs. Not having a signed lease doesn't mean a tenant has no rights; it just means the tenancy defaults to whatever your state's statute says about tenancies without a written agreement, which is typically treated as month-to-month. A landlord still can't change the locks, remove a tenant's belongings, or shut off utilities to force someone out, even without a lease. These "self-help eviction" tactics are illegal in essentially every state and can expose a landlord to real damages in court. Eviction still has to go through the formal court process, with proper notice first. Habitability laws also still apply. The implied warranty of habitability (a doctrine that exists in some form in nearly every state) means a landlord has to maintain basic livability regardless of whether there's a written lease. Without a lease, verbal agreements about rent amount and terms can become he-said-she-said disputes, which is exactly why both landlords and tenants are usually better off with something in writing, even a simple month-to-month agreement.

What can't a landlord do in Ohio?

In Ohio, a landlord cannot shut off utilities, change the locks, or remove a tenant's belongings to force them out without going through the formal eviction process in court, under Ohio Revised Code Chapter 5321 ^[6]. Ohio law also requires landlords to maintain the property in a fit and habitable condition, comply with building and housing codes, and keep common areas safe. Ohio Revised Code 5321.04 specifically lists landlord obligations, including keeping the premises in a safe condition, maintaining electrical, plumbing, and heating systems in good working order, and providing running water and reasonable amounts of hot water ^[6]. A landlord who fails to meet these duties can face a tenant lawsuit for damages or a court order to make repairs, sometimes even rent escrow, where the tenant pays rent to the court instead of the landlord until repairs are made. Ohio landlords also can't retaliate against a tenant for reporting code violations or asserting their legal rights under ORC 5321.02, which specifically prohibits retaliatory conduct like raising rent, decreasing services, or attempting eviction because a tenant complained to a housing authority .

How do landlords decide what credit score is good enough?

There's no legal minimum credit score required to rent an apartment; it's entirely up to each landlord's own screening criteria, as long as that criteria is applied consistently to all applicants. Many landlords use a rough benchmark around 620 to 650 as "acceptable," but plenty rent to people below that if income and rental history are strong, and plenty of competitive markets push the informal bar to 700+. The more useful approach, and the one experienced landlords tend to land on, is looking at income-to-rent ratio (a common rule of thumb is requiring gross income at least 2.5 to 3 times the monthly rent) alongside the credit report, rather than treating the score as a single pass/fail gate. A 580 score from old medical debt is a very different risk than a 580 score from three recent evictions and current credit card charge-offs. Whatever criteria you use, write it down and apply it the same way to every applicant. Under the Fair Housing Act, inconsistent application of screening standards, even unintentionally, can look like discrimination if it disproportionately screens out applicants in a protected class ^[2].

Frequently asked questions

Do landlords check credit for every applicant or just some?

Most landlords who screen tenants at all run a credit check on every adult applicant, not selectively, specifically to avoid Fair Housing Act problems. Applying screening criteria inconsistently across applicants (checking some people's credit and not others) can create discrimination exposure even if that wasn't the intent behind the decision.

Can a landlord deny an applicant for bad credit alone?

Yes, in most states a landlord can deny an applicant based on credit history alone, as long as the criteria is applied consistently to everyone and doesn't function as a proxy for discriminating against a protected class. Some cities and a few states have added restrictions on using eviction records or certain credit factors, so local landlord-tenant law is worth checking.

What credit score do most landlords want?

There's no universal number, but many landlords informally look for something in the 620 to 650 range as acceptable, with 700+ considered strong in competitive rental markets. Plenty of landlords weigh income and rental history alongside the score rather than using a hard cutoff.

Is a credit check the same as a background check?

No. A credit check pulls financial history: debts, payment history, collections, bankruptcies. A background check typically covers criminal history and sometimes past eviction filings. Most tenant screening services bundle both together, but they're pulled from different sources and answer different questions.

Can a landlord charge for a credit check?

Yes, most states allow landlords to charge an application fee that covers the cost of the credit and background check, though some states cap the fee amount. California, for example, caps and adjusts this fee annually under California Civil Code Section 1950.6, so it's worth confirming your state's current cap before setting a number.

How long does a credit check take for a rental application?

Most tenant screening services return a credit report within minutes once the applicant submits consent and their information, though full application review (income verification, reference calls) usually takes 24 to 72 hours in practice.

Does renting without a lease affect my credit?

Not directly. Rent payments generally aren't reported to credit bureaus unless the landlord uses a rent-reporting service, whether or not there's a written lease. What can affect credit is unpaid rent going to collections or an eviction judgment, both of which can show up on a credit report regardless of lease status.

What happens if a landlord skips the required city inspection?

Consequences vary by city, but commonly include fines, an inability to legally collect rent until the unit passes inspection, or a hold on the rental license renewal. Some cities also allow tenants to withhold rent or report unlicensed units, so confirm your city's specific enforcement rules with the local rental licensing office.

Can a tenant refuse a landlord's inspection request?

A tenant generally can't refuse a lawful inspection request if the landlord has given proper notice under state law, typically 24 to 48 hours for non-emergency entry. Refusing repeated legitimate requests can be treated as a lease violation in many states, though the landlord still can't force entry without following legal process.

Is first and last month's rent the same as a security deposit?

No. First and last month's rent covers actual rent periods, while a security deposit is separate money held to cover damage or unpaid rent at move-out. States often cap security deposits (commonly one to two months' rent) separately from rent payments, so check your state's specific deposit statute.

Do landlords have to disclose why they denied an applicant?

Under the federal Fair Credit Reporting Act, if a landlord denies an applicant based on information in a credit report, they must provide an adverse action notice telling the applicant which reporting agency was used and that they have the right to a free copy of the report ^[1]. They don't have to explain every reason for denial, just the credit-report-related basis if that was a factor.

Sources

1. HUD, Fair Housing Act overview: Screening and denial decisions must comply with Fair Housing Act protections
2. EPA/HUD, Lead-Based Paint Disclosure Rule, 40 CFR Part 745: Federal lead paint disclosure requirement for pre-1978 housing
3. California Legislative Information, Civil Code Section 1946.1: 60-day and 30-day notice requirements to terminate month-to-month tenancy in California
4. California Legislative Information, Civil Code Section 1950.5: 48-hour notice for pre-move-out inspection and 21-day deadline to return security deposit in California
5. Ohio Revised Code, Section 5321.04: Ohio landlord obligations for habitability, utilities, and repairs
6. Ohio Revised Code, Section 5321.02: Prohibition on retaliatory conduct by Ohio landlords