One of the most common questions from potential renters is whether their rental application will affect their credit score. Understanding why a rental application could affect a credit score requires a basic knowledge of credit inquiries.
There are two types of credit inquiries (hard and soft) which can occur when credit is accessed.
“Hard” Inquiries – These occur when you apply for credit or other services.
A few examples of applications which will create a “hard” inquiry:
- auto loan applications
- mortgage loan applications
- rental applications
- credit card applications
“Soft” Inquiries – These occur when your credit is pulled without the intention of extending new credit or being considered for a lending decision
A few examples of when a “soft” inquiry is created:
- Pulling your credit yourself
- Credit accessed for employment purposes
- Credit accessed for insurance purposes
- Pre-screened offers of credit
Based on what we learned above about credit scores, it should be clear a traditional credit application for rental is considered a hard inquiry. The landlord is evaluating credit worthiness of an applicant to protect their investment, and that credit evaluation creates a hard inquiry.
Using a consumer-initiated product such as MyScreeningReport.com® provides landlords with the option of accepting rental applications without adversely affecting consumer credit scores! With MyScreeningReport.com® the applicant is pulling their own credit and sharing the report with a prospective landlord, therefore creating a soft inquiry.
To find out more, visit www.myscreeningreport.com.