What is a Good Credit Score For a Prospective Tenant?

Unpaid rent, evictions, unreliable renters—they all make finding stellar tenants a challenge. But a robust tenant screening process can help you find the dependable tenants you’re looking for while weeding out the not-so-great renters.

Any thorough applicant screening includes viewing prospective tenant credit scores—a key predictor of their financial responsibility.

A tenant credit score shows whether a renter has a healthy financial background or has racked up insurmountable debt. If applicants managed their money well in the past, they’re likely to do the same in the future—including paying their rent on time.

Credit scores are vital to finding quality tenants, so they should be included in your assessment of future residents. Not sure how to integrate them into your tenant screening process or what constitutes a good score? We’re breaking it down.

What Does a Credit Score Tell You About a Prospective Tenant?

A tenant credit score is a three-digit number that reflects someone’s financial history. While lenders use them to gauge the likelihood that a loan applicant will pay the loan on time, employers, insurers, and other companies use credit scores to review an applicant’s financial responsibility.

Credit scores range from 300 to 850, with higher numbers suggesting a healthier financial background. Credit bureaus use data from credit reports to calculate someone’s credit score. Some factors include:

• The debt-to-income ratio
• The number and duration of open accounts
• Credit utilization
• Any debts sent to collection, foreclosures, or bankruptcies

Based on your score, you’ll be ranked from “poor” to “exceptional.” 

Score of 300-579: Poor

A tenant credit score between 300 and 579 points to a higher-risk applicant with a history of financial issues, like: 

• Late payments
• Bankruptcies
• Charge-offs

Score of 580–669: Fair

Tenant credit scores between 580 and 669 signal slightly less risk. The applicant probably has had some payment issues, but they’re less likely to have had serious problems, like bankruptcies or foreclosures. 

Score of 670–739: Good

Renters with 670-739 scores are within a normal range—the national FICO score average in 2024 was 717. Applicants between 670 and 739 typically display a reliable payment history. 

Score of 740–799: Very Good

Tenant credit scores within the 740-799 range are above average. Renters in this range make their utility, loan, and credit card payments on time and usually carry lower credit card balances. 

Score of 800 or More: Exceptional

A tenant credit score over 800 indicates an exceptional financial history. A renter with a high score is likely stable and reliable with a steady income and low debt. 

What is Considered a Good Credit Score for a Tenant?

Although there’s no hard and fast rule, a good tenant credit score is typically greater than 650—prospective renters with 650+ credit scores have shown they’re responsible with money.

But lower tenant credit scores aren’t always a result of financial problems. Sometimes, younger people have lower credit scores because they haven’t had the time to build a solid credit history. Or the potential resident may have recently moved to the US and they’re still establishing credit. 

Credit scores aren’t the be-all end-all of tenant finances. Your tenant screening process should also look at other criteria:  

Income. Does the applicant meet your rent-to-income ratio?

Rental history. What do previous landlords say about the renter? Do they have a record of evictions or other problems?

References. Do employers or other professional contacts say positive things about the tenant’s reliability?

Employment history. Does the applicant have a record of holding steady jobs? 

Even if an applicant has a low credit score, they might be a fantastic tenant if they meet other criteria, like a stable income and outstanding references.

Setting Your Own Credit Score Criteria

While you’ll want to look for tenants with higher credit scores, you can—and should—establish your own credit score benchmark. 

Ask yourself, “What’s the lowest tenant credit score I’d feel comfortable with?” Consider several factors when setting your threshold: 

Type of property. A higher tenant credit score threshold works well for luxury communities with high rents. But consider lower score minimums for affordable housing or properties in lower-income areas. Average tenant credit scores for these properties might be lower.

Market conditions. In competitive markets, you should be confident that tenants can pay premium rents, so a higher credit score for in-demand properties may be best.

Risk tolerance. Based on previous renter experiences or your willingness to take risks, you might set a higher score requirement. It’s really all about how much risk you’re willing or unwilling to take on.

If you have more than one property, you can set a different tenant credit score minimum for each one. Or you could use a tiered system that groups properties and gives each a score. You could use property class as a benchmark for tenant credit scores: 

• Class A properties: 740+
• Class B properties: 650+
• Class C properties: 600+

Red Flags to Watch for Beyond the Credit Score

Credit scores can’t tell you why a tenant has a specific score. Did they recently finance a car? Or have to pay off a medical debt? Dig deeper into the credit report to review potential reasons behind the score. 

An applicant might meet your tenant credit score requirement but still have some red flags in the report: 

Sudden drops in their credit score. Unexplained decreases may imply the tenant ran up substantial debt quickly or applied for several new accounts. Both could indicate financial stress.

High credit utilization ratios. If the future tenant has used most of their available credit, they might have less cash to pay rent.

A history of delinquencies. Look out for bankruptcies, foreclosures, past-due accounts, or charge-offs. These scenarios should set off warning bells about a tenant’s financial health.

Recent inquiries or new accounts. If an applicant has recently opened several accounts (or tried to), the tenant might be desperate for credit.

How to Verify and Evaluate Credit Scores Effectively

To access tenant credit scores, you’ll need to request a credit report by:

• Gathering the tenant’s data (name, address, social security number, and date of birth) and pull the report directly from a credit bureau.
• Submitting a request to one of the three credit bureaus. The bureau will send the applicant instructions on how to enter their information. Once the report is ready, the bureau will send it to you. 

The second option is safer for everyone involved—the tenant sends their sensitive data directly to the credit bureau, so you don’t have to handle it.

Either way, you’ll need to pay a fee for the report. Most credit bureaus charge $30-50 for the report. To save you and the tenant time and money, pre-screen applicants and rule out anyone who wouldn’t qualify for the unit.

Which credit bureau should you use? Three players dominate the market: TransUnion, Equifax, and Experian.

One bureau isn’t more accurate than the others—all three use the FICO or VantageScore model. But they use slightly different data to calculate the score, like TransUnion, which includes rental payment data from some landlords.

If the bureaus show that a tenant’s credit score is on the borderline, review the credit report to spot red flags. See problems? Consider talking with the tenant to learn more about what happened. They may have taken steps since then to improve their credit.

Weigh the score with other factors, like income, employment history, and landlord references. Excellent references and a high income might show that the tenant is worth the risk. 

Legal and Ethical Considerations

Be careful with when and how you use credit reports. The Fair Credit Reporting Act (FCRA) gives specific rights to consumers and sets limits on how landlords can use them. 

Pulling a credit check without a prospective tenant’s consent is illegal, so, before you do anything, get their written consent. 

Credit reports aren’t free, but can you ask potential renters to pay the fee? In most states, yes, you can ask tenants to pay for the time and cost of pulling the credit report.

But, it shouldn’t be much higher than the report fee. Each state might have additional requirements such as caps on fees. 

You might reject a tenant, charge higher rent, or ask for a higher security deposit based on the credit report. In this case, document why you made this decision. You also have to share the name and the address of the bureau that provided the report to the tenant. 

The FCRA also requires you to inform the applicant of their right to get a copy of the report within 60 days. 

To avoid a discrimination suit under the Fair Housing Act, ask for a credit report from every applicant. Set the same credit standard for everyone. Otherwise, you could open yourself up to legal and other risks. 

You also need to make sure you handle credit report data carefully. The FCRA’s “Disposal Rule” requires landlords to destroy consumer credit reports—you might have to shred paper copies or erase electronic files.

Alternatives for Prospective Tenants with Low or No Credit Scores

You don’t want to miss out on a great potential renter just because they have a low tenant credit score. Many reasons can explain why a stellar tenant might have less-than-stellar credit.

Responsible people might experience financial trouble and then work hard to make up for it. A few missed payments five years ago don’t necessarily mean the tenant would miss a rent payment. 

You have a few options to protect yourself if you want to accept a prospective tenant with a lower credit score: 

Include a guarantor. This lease co-signer takes responsibility for the lease agreement’s terms. If the tenant doesn’t pay the rent, the guarantor must.

Require bank statements. A tenant with a lower credit score may have significant savings to pay their rent. Ask for additional proof of income, like pay stubs and a letter from their employer.

Collect a higher security deposit. Higher security deposits can cushion the blow if a tenant misses rent or you have to evict them. Educate yourself on state and local regulations—some states limit how much security deposit you can collect. 

Predicting Tenant Reliability with Credit Scores

A tenant credit score can tell you a lot about a tenant in just three digits. A credit score above 650 suggests a tenant is financially stable and responsible—and more likely to pay their rent on time. 

But tenant credit scores are only one part of a holistic tenant screening process. Weigh credit scores against other factors to get a complete picture of your future resident. 

And don’t forget to keep an eye out for potential fraud in the tenant application process. A renter’s exceptional credit score might not be theirs—it could be identity fraud. The more checks you have in place to spot fraud, the less likely you are to approve a tenant based on bad data.

Look at everything—not just the tenant credit score—to find the quality renters you’ve been looking for.