Renters should understand landlord’s credit checks

With apartment costs on the rise in many parts of the country, it's important for renters to be aware of how the apartment rental industry operates, as many aspects of a landlord's operation could have a significant impact on them, DailyFinance reports.

The first thing renters should understand, according to the site, is that landlords will likely do tenant credit screening before allowing applicants to sign lease documents. However, the site says they aren't looking solely at a credit score, but more at the payment history. On-time payments will reflect positively while a history of late payments will give landlords pause.

Renters should also know what kind of rent they can afford before looking at properties. Landlords will likely use their resident screening process to check on applicants' incomes, and deny them if it may not be affordable. The site says a rough estimate is that a person's income should be about 40 times their monthly rent.

A recent report by Reis found that the average effective rent nationwide increased 0.5 percent during the second quarter of the year, jumping from $997 to $1,052 as vacancies decreased.