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NYC Landlords and Credit Checks: Hard vs. Soft Inquiries?

Updated: Oct 24, 2023




When applying for an apartment in New York City, one of the requirements that landlords or property managers may ask for is a credit check. This is done to assess the applicant's creditworthiness and determine if they are financially capable of paying rent on time. But what exactly is a credit check and how does it affect your credit score?


Understanding Credit Checks


Hard inquiries and soft inquiries. A hard inquiry occurs when a lender or creditor checks your credit report as part of a credit application process. This can include applying for a loan, credit card, or rental application. Hard inquiries can have a negative impact on your credit score, as they indicate that you are seeking new credit.


Hard vs Soft Inquiries


On the other hand, a soft inquiry occurs when a lender or creditor checks your credit report for informational purposes, such as when you check your own credit score or when a landlord or property manager checks your credit as part of a rental application. Soft inquiries do not have an impact on your credit score.


Checking Creditworthiness in NYC


In the case of a rental application, landlords or property managers may conduct a soft inquiry to check your creditworthiness. This is done to see if you have a history of paying your bills on time, and if you have any outstanding debts or judgments. The landlord or property manager will typically use this information to determine if you are a financially responsible tenant.


How Landlords Conduct Credit Checks in NYC Rental Applications


However, it's important to note that not all landlords or property managers in NYC conduct credit checks. Some may rely on references or income verification instead. Additionally, some landlords or property managers may use a third-party service that conducts a hard inquiry, which can have an impact on your credit score. It's important to ask the landlord or property manager how they conduct credit checks before applying for an apartment.


Tenant Rights


It's also important to be aware of your rights as a tenant. According to the Fair Credit Reporting Act, landlords or property managers must obtain your written consent before conducting a credit check. They must also provide you with the results of the credit check if you request it.


In conclusion, when applying for an apartment in NYC, it's important to be aware of the type of credit check that the landlord or property manager may conduct. A soft inquiry, which is done for informational purposes, will not have an impact on your credit score. However, a hard inquiry, which is done as part of a credit application process, can have a negative impact on your credit score. To protect your credit score, it's best to ask the landlord or property manager how they conduct credit checks before applying for an apartment.

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