Is it appropriate for a prospective landlord to ask me for my credit report?

Question

Context

I'm looking at renting a house.

The application the realtor sent me specifies:

Below is what is needed to submit an application on [Address]

and a few lines below specifies:

Credit Report (CreditKarma.com or comparable is fine)

I understand that it is normal course of business for realtors and landlords to request credit scores to verify renters' history and ability to pay. Normally though, they ask for permission to run a credit report, or just straight up ask what my credit is; but, in this instance they've asked me to supply the credit report.

Question: is it normal for realtors/landlords to ask for for the prospective lessee to provide their credit report?

I'd understand if this is purely to avoid paying the fee to credit reporting companies; but, is there anything more that would be concerning? (like privacy or legality?)

Other relevant info

I live in New York, New York The prospective rental is in New Jersey.

Answer 1

Is it normal for realtors/landlords to ask for for the prospective lessee to provide their credit report?

Not normal, but should be. This approach saves money (these costs are already baked into rent or application fees, so hopefully this saves you money) and it also prevents inquiries which are not a big deal but do have a small impact on credit score (multiples will get viewed as one within a certain time period, but this could prevent any inquiries).

I've been a fan of using a product wherein the tenant submits info and pays for a background and credit check and the results get sent to me, rather than me having to be responsible for handling tenants personal information. This approach of re-using an existing, potentially free, credit report is even better for tenants, as they can furnish them to every potential landlord (assuming more landlords switch to this approach).

I'm going to consider this for future renewals.

Answer 2

You said,

Normally though, they ask for permission to run a credit report, or just straight up ask what my credit is; but, in this instance they've asked me to supply the credit report

And then you asked,

is it normal for realtors/landlords to ask for for the prospective lessee to provide their credit report?

No, it is not normal. Further, and perhaps more importantly,

• it violates the intent of credit reporting (Being able to trust data that was obtained from an independent, verifiable 3rd party source - versus just trusting consumers to tell you accurately if they are risky or not). This is important because the data isn't inherently trustworthy if the consumer handles it before it is provided to the lender/landlord. Consumers with poor credit scores would be highly motivated to fake the report. If the landlord were to correctly request it themselves from a credit bureau, this could not happen.
• it violates the terms of service for the credit bureau(s) involved, and likely for CreditKarma as well. You may not care that the bureau isn't able to collect the license fee from your landlord (which it would have done if the landlord had made an official request) but if everyone undermined the system like this, the whole model would fail. Plus, the bureau is providing a service which adds value, so it seems legitimate that they would be able to get paid for that.
• it reduces the integrity of the consumer's score (yours, in this case) for future lenders. If the landlord were to pull the score correctly through official channels, it would count as a "hard pull" and would (correctly, as unfortunate as it may be) count against you for the near term - your score would drop slightly, since hard pulls indicate a slight increase in the chance that a consumer will default on future credit accounts.

If a landlord's chief concern is that they don't want to be personally handling your private data (i.e. your SSN), there are third party escrow services that will collect identifying information directly from potential customers and provide the report to the lender, without the lender needing to handle the credit pull directly.

If a landlord's chief concern is that they don't want to have to pay for your credit report, well - maybe they should just make a decision without it, if they don't find it valuable enough to pay for. Credit reports pulled by lenders from a single bureau typically cost $15 or so, it isn't a make-or-break cost when considering the financial impact of an apartment rental contract.

You have to decide for yourself if you're okay with doing this, but ultimately, it's not much different than pirating music or computer software, or any other form of license violation on an intangible product or service.

Answer 3

There are no privacy concerns for you as the information you're asked to submit is exactly the same as they could get from CreditKarma.com. It's not illegal for you to transmit your credit report to whoever you like, after all, it's your personal data.

There is a problem for the landlord who have to trust the report you give them, instead of getting one from an independent third party. It's up to them to mitigate any risks of accepting bad tenants who submitted a fake report to look better. Maybe they have their own criteria allowing them to weed out bad tenants, or perhaps they run a credit report on tenants they consider risky.

Answer 4

I wonder if this is comparable to a bank doing a soft inquiry to prequalify a customer. In this case if the customer decides to go with the the "pre-qualified offer and submits an application a credit report would be pulled directly from a cra.

Assuming everyone is on the up and up I can see the benefit to this. Unfortunately the reason why landlords pull credit is because people are not always forthcoming about their financial woes so while there are benefits there all sorts of the problems (and there are many i.e. possible discrimination, Id theft are the first that come up). Also the cras provide data (credit reports) based in specific permissible purposes so in theory a consumer using their credit report this way could be a violation of their agreement with credit karma and the like. I like the idea of certified background professionals being authorized to run the credit and then screen the results based on the land Lord's leasing criteria. It limits how many times your credit is run while looking for a new place, because the background folks are certified their certifying agency could audit to ensure compliance with privacy and properly applying the Tennant's leasing criteria anyway just my thought have a good day

Answer 5

Yes. Not only that, they are saving you money!

Landlords have a right to see your credit to evaluate you as a potential tenant. The normal way is for the landlord to charge you $20, $30 or $50 to run your credit.

A gracious landlord will let you bring a copy of your credit report. This is a leap of faith, and you should be grateful for it.

The other landlords won't do this, because they are concerned that bad tenants would use reports that have been altered (it's pretty easy to edit a PDF file). Also, those landlords make money off the credit report fees; i.e. It doesn't really cost them $30.