What Is A Consumer Credit Report?

“What Is A Consumer Credit Report?” written by Mike Marko

Are you looking for what tools to use for tenant screening?

As a property manager, the tools we can use to do background checks on prospective tenants can be overwhelming. Understanding which tools work best for your particular rentals is important to know and understand.

One of the best tools available for doing a complete background check is called the “consumer credit report”.

What’s a consumer credit report all about? You might be asking yourself this question…

When running a successful rental property management business you should be familiar with what a consumer credit report is and how it works because this is one of the common tools you will use in finding qualified tenants for your rental properties.

Today, I’ll share information about a consumer credit report and what it’s all about and where can you find in a consumer credit report.

Knowing A Consumer Credit Report

What exactly is a consumer credit report?

A consumer credit report is very similar to a credit report.

Understanding the differences between a consumer credit report and a normal credit report is essential in knowing how to use this tool when qualifying tenants for your rentals.

A credit report can be run by any company that has ties to financial institutions.  This type of report should have all the tenants financial history and debts included in it. However since this type of report is limited to the online company or credit reporting companies financial information, you could be missing key financial facts and history regarding the tenant.

A consumer credit report is a report that is run by the 3 major credit bureaus (Equifax, Experian, and TransUnion).  It has all key financial information and gives the tenant an F.I.C.O score.

What Is A FICO Score

The F.I.C.O. score was developed by Fair Isaac & Co used to evaluate if a tenant or consumer will pay their bills.

A consumer credit report is a helpful tool when you decide to accept a consumer as your tenant or not. When a tenant has a high F.I.C.O. score normally 650 or higher this will relay that this tenant in most instances will pay their bills or rent on time. The higher the F.I.C.O. score the better dependability you will have that that tenant will never be late or not pay their rent.

The consumer credit report is one of the most important reports that you should check when screening tenants. It contains relevant information that is useful for you in determining the

What Is A Consumer Credit Report

A consumer credit report is a file of information normally compiled on your prospective tenant with their authorization. This report contains all the information about a consumer’s financial status and the history of how they have paid their bills.

A consumer credit report details the debt and how a tenant has dealt with their responsibilities to pay those debts. A consumer incurs a debt that is analyzed when they are purchasing a good or service. Consumer credit will include all purchases that are obtained using credit cards. It can also be purchases done through lines of credit and some loans entered into by the consumer.

When applying for a lease or rental of a property is a normal request to have a credit report run to help qualify the tenant for the rental. Running a highly detailed and scored consumer credit report details information about the financial status of a consumer and the history of how they pay their bills.

Checking the financial status of every applying tenant is an important task of a property manager like you because this will be your basis in assessing an applicant. Their financial status will help you determine if they have the capability of being a good paying renter or if they are able to afford the lease that they will be entering into.

Everything about an applicant’s financial stability, capacity, credit history, and F.I.C.O. score is detailed in this report. The consumer credit report serves as proof of a person’s financial standing and how stable it is.

What’s On A Consumer Credit Report?

There is a lot of information that can be found on a consumer credit report. Here is the list that can help you further understand this information.

Personal Information

In a consumer credit report, it’s only natural for you to see details about a person. These are all identifying details which you’ll first see in a credit report.

Data such as the consumer’s name is what you will find in the first section of the report. You can also see the current and previous addresses of the applicant/Current and previous addresses are also included. Another basic information you’ll see in the first section of a consumer credit report is the applicant’s employment history.

The most important item needed to run the consumer credit report is the consumer’s Social Security number. Since this is highly sensitive personal information, as a property manager you should have a system to lock up and protect this information.

When you are done with using the tenant’s personal information you should make sure that you have shredded all the paperwork for the consumer credit report. This is a confidential information that you should keep so that no other person can use it in attempting to commit an identity theft.

Account Details

In this part of a consumer credit report, you will find out a detailed information about the account or accounts of the consumer. You will discover in this section if the applicant or consumer is good in paying their credits.

It includes the following details about the consumer:


   Account type

   Account number

   Date the account was opened

   Account balance

The status of every account recorded by the consumer in his or her the application form can also be found in this section. There will be a breakdown of each account. The breakdown provides the entire consumer’s payment history. Even the date of last activity and contact information of the credit issuer is in this section.

A summary of all past-due accounts along with accounts that have a negative credit history is also compiled. All of it can be seen in this part of the consumer credit report.

The account history part of a consumer credit report can give you an idea if the applicant is responsible for paying their credits accounts on time. It also will allow you to run a debt to income ration to see if the tenant can afford the lease they will be entering into. If you don’t see any current late payments on their accounts, there is a high possibility that the person will not bring you any problems in paying rental fees.

Credit History

When you have a consumer credit report, it’s only natural to see the credit history of the consumer. Afterall, a credit report won’t be a credit report without having anything to do with a person’s credit.

You’ll find details about the number of accounts and how much debt the tenant is responsible for. The listing of credit accounts can be open or closed. The type of account will also be noted and reflect on this section of the credit report. The types of accounts you will usually find in this section are mortgages, installments, revolving credit and similar debts the consumer has entered into.

Credit inquiries about the consumer for the last 12 months will also be visible. Accounts in good standing, as well as any accounts that are past due, are also included in this section of a consumer credit report.

Credit Inquiries

Credit inquiries can also be found in a consumer credit report. These credit inquiries can either be hard inquiries or soft inquiries.

A credit inquiry classified as a hard inquiry is generated when an authorized company requested a copy of a consumer’s credit report. A hard inquiry means that the tenant is applying for a loan or a purchase and needed to be approved by a bank or a financial institution to obtain that purchase. The number of hard inquiries within a 12-month period will be tracked in the consumer credit report. They are then taken into account once the consumer’s FICO score is calculated. An abundance of hard inquiries may negatively impact a consumer’s credit score.

Make sure to watch out for applicants who have a lot of hard inquiries on their consumer credit report.  This typically results in them having a lower credit score. Hard inquiries show that the tenant is applying to purchase high ticket items… which could affect their ability to pay all of their future bills (including rent) on time.

Credit inquiries classified as soft inquiries can be generated by a consumer’s current creditor or creditors. These creditors check the consumer’s credit status. It can also be generated by credit card issuers who wish to review a consumer’s file hoping to extend an offer to the consumer. Soft credit is a simple inquiry done by employers and other institutions and since they do not involve applying or qualifying for a loan they do not affect the tenant’s credit score.

Top1Score has the ability to score the applicants based on their overall asset level, which provides you additional information to weight the consumer credit report against.

Consumers can also generate a soft inquiry if they wish to review their consumer credit report.  This classification of a credit inquiry will not have an impact on a consumer’s credit report.

What Greatly Affects A Consumer’s Credit Score

The consumer credit report assigns an F.I.C.O. credit score as a summary of how good or bad the credit of a consumer. This credit score will give you an overall assessment of the creditworthiness of an applicant.

There are three ways a tenant can positively affect their F.I.C.O. credit scores:

  1. Paying their credit debts on time
  2. Paying housing mortgages on time
  3. Paying car loans and other types of consumer debt loans on time

The most common factor that will positively or negatively affect a consumer’s credit score is their payment history. Skipping payments or paying late will negatively affect a credit score. And a negative impact on a credit score will also give a negative impact on the consumer’s credit report.

Having high balances on multiple credit cards could also indicate a greater risk of default and this may bring an applicant’s score down.

If an applicant has a long history of good credit their F.I.C.O. score will be high normally over 700. However even one missed payment or the tenant having a habit of missing or late payments will greatly negatively affect their credit score. Additionally, when a tenant is in the habit of constantly applying for a new credit this will also normally lower their credit score. When an applicant has a habit of paying their credits on time and not missing to pay any credit, that person will have a high credit score. In running your property management business you might determine a level of acceptable F.I.C.O. scores to qualify for rent or not qualifying for rent. For instance, you might only want tenants that have a 700+ F.I.C.O. score to rent to and deny any applicants with an F.I.C.O. score less than 700.

The payment history will remain on a credit report for around 6-7 years. As a property manager, you should also assess an applicant’s payment history for the past 6-7 years. This assessment will allow you to determine through the tenant’s history if they are financially stable and dependable in paying bills and rents on time.

Final Thoughts About The Consumer Credit Report

Understanding why it is important to run a consumer credit report compared to a basic credit report can be the difference between finding dependable bill paying renters vs bad renters.  Running the report is easy all you need are some details that will help you further understand how this report can be used to qualify tenants for rentals.

Knowing your tenant’s complete financial history with F.I.C.O. score is the best way to evaluate and use the consumer credit report to your advantage in renting your vacant properties. Using the information and details in the tenant’s consumer credit report will guide you in deciding whether you will accept a consumer to lease your property or not.

It’s only wise for a property manager like you to understand a consumer credit report to help you in your business.

Comment below if you have any questions or comments about the consumer credit report.




Suggested Articles:
1. How To Check Credit Of Prospective Tenants?
2. Are Background Check Services Needed?
3. What Does The Rental Background Check Cover?

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Article: What Is A Consumer Credit Report?

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