What Credit Check Will a Landlord Pull When You Try to Rent a Luxury Apartment in Houston?

The bustling luxury apartment market in Houston, Texas has recovered well despite the impact of the pandemic. Just last month, national multifamily real estate development leader Wood Partners announced the groundbreaking of their newest luxury residential community in the area – Alta Cypress Springs. According to the company, the young professionals and families living in west Houston will find their plethora of Class A amenities perfect for their community. Of course, acquiring an average apartment isn’t the same as renting a luxury apartment. If you’re worried about what type of credit check is involved with renting a luxury apartment, here’s everything you need to know:

Credit Scores and Luxury Apartments

Every state, city, and apartment complex will have different application requirements, and these can be extensive. Moreover, your landlord will definitely run a credit check as part of the approval equation. Most sources suggest a minimum FICO credit score of 650, but because the luxury apartment market is quite competitive, you’ll likely need a higher credit score. In 2021, renters in high-end buildings had an average score of 669, 43 points away from the average score of renters in mid-priced buildings, which was 626.

The Reason for Credit Check Requirements

Why do credit scores and credit checks affect the likelihood of being approved for an apartment significantly? Credit scores include debts, credit payments, bankruptcies, rental history, and income, for example. And of course, landlords want to ensure that their property will be paid for and kept in good condition before leasing them out. It only makes sense to utilize credit scores as a way to evaluate potential renters, especially for luxury apartments in attractive areas such as Houston.

Hard vs. Soft Credit Check

That said, there are two types of credit checks or credit pulls. The difference between hard vs soft credit checks lies in their effect on your credit score and the motive for the pull. Hard credit checks are associated with mortgages, car loans, student loans, credit card applications, and the like. A hard check can lower your overall score by up to five points – an effect that lasts for two years. Because of this outcome, performing a hard pull on your account requires your permission. Now we move on to soft credit checks, which are much more relevant to the topic at hand. A soft credit check can be performed without your permission, and will not affect your credit score whatsoever. Many landlords will run a soft credit check alongside your application. These are also often performed by employers for background checks and card companies when checking your eligibility for their reward systems. You can also run a soft check on yourself to monitor your own score. Keep in mind though, that to rent a very nice apartment, you might also be asked to pay stubs and provide employment verification to complete the application.

Can I Fail a Soft Credit Check?

A soft check is something you can’t fail on, because you’re not exactly requesting a new loan or credit line. It can, however, affect your chances of being approved for the rental in question. Fortunately, Houston residents aren’t lacking when it comes to credit scores. With an average of 757, the residents of The Woodlands have some of the highest credit scores in Texas, placing 287th among the 2,572 US cities covered in the study. Montgomery and Friendswood follow closely with a median credit score of 738 and 732, respectively. If you’re living in these Houston-area suburbs, there’s a good chance you might not need to worry about acing a soft credit check. However, if you think your credit score is a bit subpar, there are a few ways to mediate this. Some management companies will have flexibility when it comes to dealing with applicants with bad credit, as long as the latter party is willing to pay a higher security deposit or go for a ‘trial’ shorter lease period. Co-signing with another person with a higher credit score can also be an option. Overall, it’s best to keep your credit score in check by settling debts, paying bills on time, and spacing out credit applications.

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