Apartment Hunting and Inquiries

[Anonymous]

A friend of mine asked me about hunting for an apartment and whether or not the inquiries would be hard or soft. I have always operated under the idea that an inquiry is only "hard" if it is an application for new credit. I do not consider an apartment lease as new credit, however in a letter from his current landlord it was stated that among the reasons to remain is that any inquiries by other apartment complexes would harm his credit score. If this is not true, I would like to take his current landlord to task for making false statements to their tenants, but I want to verify it first. I would love to see a link that can confirm the correct answer. Thank you in advance.

[donkort]

In the process of me applying for a co-op, the co-op board  did an inquiry on "SafeRent," something frequently used by landlords to screen tenants.  It was shown as a hard inquiry on Experian only.

I believe landlords frequently perform hard inquiries, for they do frequently check your credit.  I would guess that, frequently, the inquiry only shows on one CRA (credit reporting agency such as Experian).

As a rule of thumb, if a background check is performed, it will be a hard inquiry.

[Jazzzy]

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@Anonymous wrote:
A friend of mine asked me about hunting for an apartment and whether or not the inquiries would be hard or soft. I have always operated under the idea that an inquiry is only "hard" if it is an application for new credit. I do not consider an apartment lease as new credit, however in a letter from his current landlord it was stated that among the reasons to remain is that any inquiries by other apartment complexes would harm his credit score. If this is not true, I would like to take his current landlord to task for making false statements to their tenants, but I want to verify it first. I would love to see a link that can confirm the correct answer. Thank you in advance.

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I don't have a link for your answer. My assumption is that it could absolutely be a hard pull, and, yes, that is part of FICOs scoring and could impact your FICO score, but usually only slightly.

I respectfully wanted to address your statement that you don't consider an apartment lease as new credit. It certainly is new credit. I am a landlord, and when I rent to you, I am trusting that you will pay me x amount of dollars each month. I have a mortgage payment to make, real estate taxes to pay, etc. Unpaid rent negatively affects the property owner, just as an unpaid car payment or credit card payment affects whoever extended that credit to you. Rent is totally unsecured credit (except for a security deposit that will only cover a minimal amount of defaulted rent). Leasing an apartment is an important credit decision for both landlord and tenant.

[RobertEG]

Credit inquiries under the FCRA only regulate what the requestor can obtain.  It does not regulate whether an inquiry is coded as a "hard" or "soft" inquiry as regards credit scoring.  The terms "hard" or "soft" inquiry are not even mentioned in the FCRA.

Access to credit reports is defined under the FCRA 604(a)(3)(F) as permissible if the requestor has "a legitimate need for the information in connection with a business transaction that is initiated by the consumer."  Application for rental of real property is certainly a business transaction initiated by the consumer.  It does not require the extension of a fixed or revolving amount of credit, and thus is not limited only to lendors of money.  So the issue of whether it is or is not an extension of credit is, IMHO, moot.

How they choose to report that inquiry is not regulated, and is their option.   Assume it will be a hard inquiry.

Message Edited by RobertEG on 11-21-2009 02:59 AM

[jaysdad2k]

When I joined the Boards in February 2008, there was a hard inquiry on my TU from November 2006 by National Tenants Network. We had asked the landlord to add me to the lease in November 2006 and I would be taking over the lease when it renewed in January 2007. We were concerned that I may not qualify on my own, but it must have been OK. In that case, ignorance turned out to be bliss.

If I were hunting today, I would print out a current TU and EQ and take it with me. Then I would let the people know they could pull my report when we are ready to sign the contract.

[DI]

When i applied for an apartment, there was a hard pull on my TU report.  It's my understanding whenever you submit an application to rent and the landlord pulls your report, it will be a hard inquiry.