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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.

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    There are some home rental scams out there. Are you positive the landlord is really a landlord? A walk-through of a locked house would prove they're legit, but a phone call could be riskier. If you provide the report, there is no paper trail identifying the landlord, in case a scam is committed soon. – donjuedo Aug 20 '19 at 14:08
  • @donjuedo definitely legit. Already did the walk through. – KareemElashmawy Aug 20 '19 at 14:11
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    @donjuedo with things like AirBnB, a walkthrough isn’t too difficult for a scammer to pull off, fwiw – thehole Aug 20 '19 at 14:17
  • @thehole except airbnb's are usually furnished (yet not lived-in), since they are usually short term rentals, and bringing in all new furniture for a short term doesn't make much sense. – Harper - Reinstate Monica Aug 20 '19 at 19:41
  • There are also services that provide this for landlords, here's TransUnion's product mysmartmove.com – IVcrush Aug 20 '19 at 21:23
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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.

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    How would you protect yourself from a prospective tenant constructing a fake credit report? – brhans Aug 19 '19 at 17:32
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    +1 I have personally been asked for this on a rental application, specifically even using my Credit Karma report that I printed as a PDF and sent along, and it worked great. The nicest part for me is that I don't have to worry that there is some error on a report I didn't know about, as I get to see it before I send it. And if there was information you weren't comfortable sending (account numbers, medical information, etc), you have the option to print it, black it out, and re-scan it before sending on. So it is actually much nicer, from the applicant side, than sending in my SS#, etc. – BrianH Aug 19 '19 at 17:38
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    @brhans That is a risk, but it seems small, I always tell prospective tenants that credit score is not that important (mostly true, steady income is far more important), so hopefully that helps them feel like there's no need to lie. If everything else checks out (income verification, prior landlord reference) and they are able to create a convincing fake credit report, then I'm okay with taking that risk to create a lower hassle situation for everyone. – Hart CO Aug 19 '19 at 17:59
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    @brhans I would say that faking a credit report is a fraud and can you get in more trouble than what's finding a flat worth. – Tomáš Zato - Reinstate Monica Aug 20 '19 at 11:16
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    Also, there's potentially the issue of the customer choosing the credit report agency that portrays them in the best light (or is this a feature?). The same thing applies with background checks - if someone is told "find a background check company, get a copy of yours, and send it to us", there's an incentive to pick the one that omits the most negative information even if it is not falsified by the customer. – Robert Columbia Aug 20 '19 at 13:20
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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.

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    I'm skeptical of your claim that an individual choosing to share their free credit report with others is violation of terms of service, did you come across any references that support this idea? I haven't seen anything yet. As a landlord if I'm willing to trust that they've sent me an unaltered copy of their credit report, that's my prerogative, it doesn't diminish the value of credit reports in any way. – Hart CO Aug 19 '19 at 20:29
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    I found no such language or references to support this notion, I'm intrigued by the idea, but skeptical. When I pull a report for a prospective tenant through a service there are warnings about consequences of misusing the results, but that's different than an individual sharing their report. – Hart CO Aug 19 '19 at 20:41
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    Your suggestion was that if it's not worth the money I should make decisions without credit reports. If I do that, the credit bureau doesn't get revenue and hard inquiry score hit doesn't happen. If someone freely shares there credit report with me to help bolster their application, the net impact to the credit bureaus is zero. I don't think there is real risk of everyone doing this, those that furnish the data will continue to use it in the traditional method. – Hart CO Aug 19 '19 at 20:44
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    @dwizum: No, you didn't get his point. (1) The transaction is not the type for which a hard pull is proper. Hard pulls are for credit accounts, not housing or employment or banking deposit accounts or identity verification. (2) He's not going to pay for a hard pull, so the number of inquiries will be not increased even if he respects the contract that he's not even a party to and makes the decision without seeing any credit report. – Ben Voigt Aug 20 '19 at 4:17
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    I find it... worrying that someone would consider personal information on an individual to be the property of the company that datamined it. It's not piracy to share facts about yourself. The service the credit bureau provides is being a 3rd party source - if the landlord/realtor values that, they can pay for it. If they do not, tough luck. – Ruther Rendommeleigh Aug 20 '19 at 8:04
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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.

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    The information on a report ordered by the consumer is not the same as when a third party orders it. (And what you can see through Credit Karma is just a summary, less than either of those). – Ben Voigt Aug 20 '19 at 21:51
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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

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  • 1
    I was wondering the same. The landlord could be requesting the information from the applicant, then if everything seems otherwise ok, to check it themselves. It seems that would cover all the concerns that have been mentioned. Anyone that faked their credir score would be caught red-handed and rejected at that last point. – Ángel Aug 21 '19 at 19:34
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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.

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    Are you sure you're talking about the US? I have never had a landlord charge me for filing a credit report nor ask me to provide one. That is not the "normal" way by any stretch. And there should be no reason or desire to feel "grateful" in any way when doing business—it's business. – user91988 Aug 20 '19 at 19:49
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    @only_pro I'm talking about parts of the US, and in those parts virtually all the landlords did it. (Obviously if it was a minority, they'd be at huge disadvantage). I've even seen landlords run scams, they'll show tenants through the apartment 10 at a time, collect $30 from 2/3 of them, and do that twice every Saturday and Sunday. A month later the $1000 apartment is still being advertised. Gee! – Harper - Reinstate Monica Aug 20 '19 at 20:30
  • "they're avoiding a hard inquiry to your credit" is wrong, because parties other than lenders order reports in a way that isn't counted in the number of inquiries (soft vs hard pull). A landlord is not a lender. An employer is not a lender. – Ben Voigt Aug 20 '19 at 21:50
  • @only_pro Certainly you've paid application fees, that is very typically used to cover the cost of background/credit checks (and likely some extra for the landlord). I never liked the idea of making money from collecting applications, so instead of charging an application fee I have the prospective tenants pay a third party directly for the background/credit check (and only those that passed initial screening). This approach is even better as there's no fee at all if they have a recent report available. – Hart CO Aug 20 '19 at 23:16

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