Each of the three major credit bureaus, TransUnion, Equifax, and Experian, provide a consolidated report to help you screen prospective tenants. But, which one is the best? Weâve outlined the main differences among these services, plus one tenant screening method thatâs fast, easy, secure and free for landlords and rental agents.
Each of the three major credit bureaus, TransUnion, Equifax, and Experian, provide a consolidated report for screening prospective tenants. They may seem to all be equal, but there are differences in a real estate credit check: Equifax vs. TransUnion vs. Experian. Weve compiled this content to help you determine the best credit check for agents and landlords.
Weâve outlined the main differences among these services, plus one tenant screening method thatâs fast, easy, secure and free for landlords and rental agents.
When searching for a new rental property, one of the first steps is usually for the landlord or property manager to run a credit check on prospective tenants. But when they check your credit, are they looking at your TransUnion or Equifax credit report? Or both?
As a renter, it can be confusing to understand exactly how landlords evaluate your creditworthiness and what credit information they access to do so. Getting a better sense of whether landlords prefer TransUnion vs. Equifax can help you better prepare your credit reports when apartment hunting.
Why Landlords Check Your Credit
Running credit checks on rental applicants is standard practice for most landlords and property management companies They do this to gauge your financial responsibility and ability to consistently pay rent on time,
Your credit reports reveal key details like
- Your payment history on loans and credit accounts
- How much revolving credit you have available and are using
- Any negative marks like collections or bankruptcies
While your credit reports don’t show your exact rental history, they still offer landlords crucial insight into how you manage debt and payments. Good credit can provide confidence you’ll be a reliable tenant, while credit issues may raise concerns.
How Landlords Access Credit Reports
Landlords have a few options when it comes to checking an applicant’s credit, including:
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Tenant screening services – These companies provide tenant background checks, including credit reports from one or more bureaus.
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Credit bureaus – Landlords can purchase credit reports directly from Equifax, Experian and TransUnion.
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Landlord associations – Organizations like the National Association of Independent Landlords offer credit reports to members.
Which option a landlord uses impacts whether they access your Equifax or TransUnion (or both) reports. The source also determines which credit scoring model they see.
TransUnion vs. Equifax: Key Differences
TransUnion and Equifax are both large, reputable credit bureaus that collect financial data submitted by lenders and creditors. But there are some important differences between the two when it comes to credit reports:
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Payment history – The specific accounts and payment details reported can vary between bureaus since lenders don’t always report to both.
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Total debt – The overall debts listed often differ. One bureau may show more or less debt depending on creditors reported.
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Credit scores – Proprietary score formulas mean scores can differ significantly between Equifax and TransUnion reports.
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Collections – One report may list collections accounts while the other doesn’t, since not all collectors report to both bureaus.
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Addresses – The historical addresses can differ, with each bureau having unique addresses not reported to the other.
Do Landlords Prefer One Bureau?
Most landlords will value having data from both credit bureaus to get a complete financial profile of an applicant. However, some landlord vetting services may use just TransUnion or just Equifax reports.
Tenant screening services tend to favor TransUnion reports, but may offer Equifax as an add-on option for landlords.
Direct from the credit bureaus, Equifax provides the longest credit history at 81 months compared to TransUnion’s 78 months. TransUnion offers more customized tenant-screening products.
Landlord associations may contract with just one bureau. National Association of Independent Landlords uses TransUnion, for example.
For landlords, the ideal scenario is to access both TransUnion and Equifax reports. This ensures no negative marks or discrepancies are missed by relying on only one.
What Landlords Look For in Credit Reports
While credit scores give a quick snapshot, most landlords know examining the full reports provides more useful insights. Some key items they analyze:
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Payment history – On-time payments for the past 2 years are ideal. Late payments may need explaining.
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Credit utilization – Lower revolving balances relative to limits are better. High utilization can signal risk.
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Collections – These indicate inability to pay past debts, raising concerns about rent payments.
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Public records – Bankruptcies and evictions (where applicable) are red flags.
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Addresses – Landlords often cross-check addresses with your rental application.
Tips for Preparing Your Credit Reports
If you’re planning to apply for an apartment soon, take steps to optimize your Equifax and TransUnion credit reports:
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Check reports from both bureaus to see what landlords will evaluate.
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Dispute any errors that could negatively impact your scores.
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Lower credit utilization ratios by paying down balances.
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Avoid new credit applications that add unnecessary inquiries.
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Continue making all payments on time.
Having positive, accurate details on both your Equifax and TransUnion reports will provide confidence to landlords reviewing your application.
The Bottom Line
While practices vary, most landlords prefer to examine credit reports from both major bureaus, Equifax and TransUnion, when screening rental applicants. There are often differences between the two reports that could impact how a landlord evaluates your creditworthiness.
Checking your credit reports ahead of time allows you to dispute errors, align details between bureaus, and explain any past credit issues to landlords upfront. Taking steps to optimize your Equifax and TransUnion credit history can improve your chances of approval for your next apartment.
Overview comparison of the big three
Even though areal estate credit check comparison of Equifax vs. TransUnion vs. Experian has only minor differences, youâll want to examine further. You may wonder which credit score apartments look at: TransUnion, Equifax, or Experian? That may seem like the best path to take, but you should consider these points in your decision.
Equifax uses a credit score range of 280-850. The credit factor weights are:
- Payment history (35%)
- Credit utilization (30%)
- Credit age (15%)
- Different types of credit (10%)
- Number of inquiries (10%)
TransUnion delivers a FICO credit score range of 300-850. They weigh the score in this way:
- Payment history (40%)
- Credit utilization (20%)
- Credit age (21%)
- Recently reported balances (11%)
- New credit (5%)
- Available credit (3%)
Experian calculates a credit score of 300-850. The credit score breakdown is:
- Payment history (35%)
- Credit utilization (30%)
- Credit age (15%)
- Different types of credit (10%)
- Number of inquiries (10%)
Each bureau gathers data from lenders, credit card companies, and other financial institutions. Creditors can select which bureaus they want to report to. Some include rental history payments if reported by a landlord.
Each bureau offers additional services such as credit monitoring and identity theft protection. Consumers can also freeze their credit with each bureau, which blocks anyone from pulling their credit report.
Each credit bureau report is just as accurate as the next. Regularly checking credit reports is the best way for consumers to find and dispute errors.
Comparing scores is an excellent way to evaluate a real estate credit check of Equifax vs. TransUnion vs. Experian. As noted, the score range and weighting are unique for all three. Make a comparable assessment by looking at the same time period.
Why the accuracy of a credit report check matters
When screening prospective tenants, you need reliable and unbiased information to make an informed decision. It would be great if you could simply take an applicantâs word, but itâs a risk with major potential consequences.
To better evaluate applicants, landlords use atenant screening report. This reveals a rental applicantâs financial and rental history. These reports can help landlords and rental agents identify any risks that tenants may pose to the property and potential maintenance issues they may cause. Because so many reports are available, you should know what each report includes and how easy it is to interpret. Then, you can decide which one is right for you.
Which Credit Score Do Apartments Look At: TransUnion Or Equifax? – CreditGuide360.com
FAQ
Do landlords check Equifax or TransUnion?
For rental applications, TransUnion and Equifax reports are the most commonly used, though practices vary by property management company. It’s worth checking your score from multiple bureaus to avoid surprises during the application process.
Which credit score do landlords look at?
Do houses look at TransUnion or Equifax?
Mortgage lenders may review credit scores from Experian®, Equifax®, and TransUnion® for loan applications. Lenders also assess income stability, debt-to-income ratio, and assets to evaluate mortgage applications. Higher credit scores can lead to more favorable mortgage terms and interest rates.
Which is more credible, TransUnion or Equifax?
Of the three main credit bureaus (Equifax, Experian, and TransUnion), no particular bureau is considered better than another. A lender may rely on a report from one bureau or all three bureaus when deciding whether to approve a loan.