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How Do Credit Checks Work?

  1. Aug 31, 2009 #1
    Basicly what I am trying to find out is what means credit check companies have to check on your income besides your employer? Can they get your tax or IRS information for example?

    The reason I ask is that I just put in an application for an apartment and I have a slight issue with my income. My employer pays a significant portion of my income to me under the table. The credit check people want pay stubs to show my income but instead I furnished them with a letter from my employer explaining my wages. First off I was concerned that they would not accept the letter though I got the idea because the last apartment I applied for they gave it as an option (though not one I took at that time). Then I started thinking and realized that if they can somehow attempt to verify my income through some other agency than my employer my application is totally shot. And I'm really hoping to get this apartment.
  2. jcsd
  3. Aug 31, 2009 #2
    I didn't think your credit score had anything to do with your income... What they'll do is ask one of the reporting agencies for your score and make a judgement based on your credit history. Basically whether or not you've paid your bills on time in the past.

    As far as income verification that would probably be up to the manager of the complex you're trying to move in to... so if you can get those people to talk to your people you should be alright. (The reason they want your stubs is because no one but your employer can verify what you make.) I could be wrong...

    As far as getting paid under the table that's a grey area, legally. Pretty much amounts to tax evasion so yeah, I can see how you'd be worried about it. It's not like you want to go around making an issue of it.
    Last edited by a moderator: Aug 31, 2009
  4. Aug 31, 2009 #3
    I've been looking around and there are plenty of services that can be used to check information on prospective tenants. I found a couple of different 'income verification' services but they are quite different. One says I have to give my consent for them to get my information from the IRS, another offers tax reports without mentioning my consent being required, and yet another service claims to be able to provide employment and income verification "from multiple sources".

    As far as who checks my income goes the woman who took my application said that they just submit the information to the credit check company, including copies of pay stubs, and get back the results. She couldn't even tell me if my letter would be accepted, she just said that I would have to submit it and wait and see.

    These people are annoying and not very helpful but they have rather decent low rent apartments in the area I am looking. Argh! The last woman I dealt with there acted annoyed to have to help me with anything and spent the whole time talking to a friend on her cellphone!

    Sorry, this whole apartment hunting deal has been really stressful and annoying.
  5. Aug 31, 2009 #4


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    Note, you are talking about two different things here. Tchitt is right that a "credit check" is what it says it is: a credit check. Income and employment verification information is provided by you and a company who does the verification might simply call your employer to verify if what you told them is true. I'm not sure that's really even necessary, though, since they have your pay stub.
  6. Aug 31, 2009 #5
    They just call it a credit check but if you look up the companies that provide "tenant screening" they do alot more than just a credit check. Since they asked for proof of income to send with my application I am pretty sure it is more than a standard credit check.

    I am assuming that more than likely they will just call my employer, especially since I gave them a letter from my boss instead of check stubs, but I am worried they will do more or possibly not accept the letter.

    So far the only thing I have found that has been very helpful was a "tips for apartment hunting" article that says they don't usually actually probe very deeply for their screening process. According to the article they are usually most concerned with finding whether or not you have any evictions or major debt. I wonder how accurate that is. I'm not applying for a really nice place or anthing so that may be more true here.
  7. Aug 31, 2009 #6


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    If part of your income is paid "under the table" then it is unlikely it is reported on your income tax. If you do report it, then your boss, well, good luck to them. What I'm saying is that if your income is not in your income tax return, companies that use returns as the basis for income verification won't see it.

    Will the apartment manager accept verification by phone from your boss?
  8. Sep 1, 2009 #7
    Yes, this is exactly what I am concerned about. I am hoping that they will just call my employer for verification.
    When I asked the woman behind the counter whether or not there was any way to find out if the credit check company will accept the letter from my employer and/or call them she said all we could do would be to send it and wait to see what happens. Unfortunately I am going through a property management company. Property owners hire them to get tenants for their property, collect rent, ect. So I'm not dealing with a property manager/owner that I can really discuss this with. I'm dealing with a company that rents out apartments for over 400 different properties. I'm fairly certain the entirety of the verification process is farmed out. If my application is denied I will hopefully be able to talk to someone about it but I wont get the apartment I am trying for, it will go to the next person in line.

    I don't really need advice, I am just fretting since I really need an apartment and wondered if anyone knew the likelihood that they would try to get verification of my income from some other source than my employer.

    Sorry, I've been living in my car and I am going bonkers.
  9. Sep 1, 2009 #8
    I understand your pain :tongue: I've rented a lot of apartments and each time I move I drive myself crazy with everything that could possibly go wrong because I normally only move when I NEED to move.

    From personal experience alone I've found that it's rarely such a complicated process and I really doubt you've got any reason to worry. A letter from your employer will almost certainly do the job, in my opinion. Unless of course you've got some sort of totally screwed up arrangement and work for some random dude who's trying to avoid paying payroll taxes... technically if neither of you are reporting it then you're both breaking the law and that doesn't exactly look good. I'm probably not the only person who'd think of this.

    Are you working for a corporation or a mom 'n pop shop?

    Is this a "nice" apartment complex or are you dealing with the type of company that's got more relaxed policies? It really does make a hell of a difference... not trying to scare you or anything.

    Edit: Just reread your earlier post and if the apartment isn't anything fancy then I really wouldn't worry. Like I said, in my experience they don't probe that deeply at all. As long as they believe the letter from your employer is actually from your employer and have the means to talk to him directly I'd say you're in the clear.
    Last edited by a moderator: Sep 1, 2009
  10. Sep 1, 2009 #9
    I'm working for a small incorperated security company. The Boss is not very good at balancing the books and has decided to pay overtime under the table most likely to avoid extra payroll taxes. Since I have been worried about how this will effect my ability to get an apartment I have been thinking about getting them to change this, though I am worried he may just move me to another schedule and I'll lose my overtime.

    The company I think manages both nicer places and not so nice places but the one I am applying for is definitely lower end. So far most of the people I have talked to seem to concur that they are likely most interested in whether or not I have any bad credit, which may only increase the deposit, and whether or not I have any evictions. So I am fairly confident but still have 2-4 more days of waiting. :-/

    Thank you for your input Tchitt, and everyone else too.
  11. Sep 1, 2009 #10


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    Fingers crossed, TSA. Keep us posted. Nothing like reading a success story a day, no matter how small :wink:
  12. Sep 1, 2009 #11
    Thank you Borek. I will. :smile:
  13. Sep 1, 2009 #12


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    That was my point. I wanted to clarify that though you asked about "credit checks", that really isn't what you are wondering about. You are wondering about the whole economic portion of the application process. That's why when tchitt said a credit check doesn't have anything to do with your income he was right, that just wasn't what you were really looking for. I just wanted to get everyone on the same page.
    Well, I don't know that there is such a thing as a "standard credit check". When you apply for an apartment, a house, or even a credit card, these people are interested in more than just your credit rating. They are interested in your income and expenses because that tells them if you can pay back the loan/pay your rent and they are interested in your credit report becaus that will tell them if you will.
    They may not accept the letter. Such organizations tend to be very rule oriented and they want what they want. But as to whether they will call your boss to verify the employment, some do and some don't.

    The bottom line is when you work for an employer who is treating you illegally, there are consequences involved in being in that situation. I had an employer who was like that too and it sucked. I'm glad I'm out of that situation and working for a real company now. But I got stiffed on about $5,000 worth of income last summer by a boss such as yours.
  14. Sep 1, 2009 #13


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    If they are a property management company, they may not care about you individually SA. Also, the market is a huge driver, if there is someone in line to take the apartment if you don't get it, then there is no reason, unfortunately, for them to make an exception for you.

    I do hope you get it. Maybe you can be charming enough to make them go a bit farther for you. :smile:
  15. Sep 1, 2009 #14
    Russ: Yes. All those things are pretty much what have been going through my mind since I applied. At the time I was too concerned with getting an application in to getthe place to really worry about what the issues might be, and the lady there was not very helpful with my questions unfortunately. So I just put in the app and crossed my fingers.

    Evo: That's pretty much what I figured, especially after the second time I went in and talked to that woman who was more interested in her personal call on her cellphone than talking to me. Grrr, I was about to tell her off for being rude but restrained myself for fear that she might be able to mess up my application process.

    Charming though, I'm not sure I am capable of. lol
    The best I've got is puppy dog eyes. ;-p
  16. Sep 1, 2009 #15


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    I just re-signed my lease for another year today. I couldn't believe all of the new things they put in there, I was signing addendums for a good 45 minutes. Basically, I swore that I was a millionaire saint with otherwordly powers. :uhh:
  17. Sep 2, 2009 #16
    Saint Evo of Austin (or where ever is appropriate)? Have you shaken off all of your admirers from here? Because we could maybe start you a little cult and you could use your followers as references.

    And that made me think of something else. I wonder if anyone has ever used an online "friend" as a reference for a job or apartment before.

    "For references contact PhysicsForums.com [ext. General Discussion] and ask after GregBernhardt or Evo. Please do not contact russ_watters as I annoy him too much, IvanSeeking should be ok since I do not think I have annoyed him lately. kthxbai"
  18. Sep 2, 2009 #17
    I think credit reports can be used to some extent to check income, although indirectly. For instance, if you have a couple of credit cards with a $100,000 limit, a mortgage on a $1.2 million dollar home, and a $50,000 car loan, chances are that you are pulling in a six figure salary.

    It is now law that the major credit reporting agencies have to give you a free copy of your credit report every year. If you are interested in what is and is not in there (and you should be), then go over to https://www.annualcreditreport.com/cra/index.jsp and get your reports. You should check it once a year just to ensure that it is correct.

    If you are looking for a home loan, you might want to check your FICO score too (that is extra). It basically determines your credit-worthiness based on your credit history.
    Last edited by a moderator: Apr 24, 2017
  19. Sep 2, 2009 #18
  20. Sep 2, 2009 #19
    Your credit report or score doesn't show your income. The only two ways to verify the income is from the IRS or your employer. I would think that if your employer states your income that would be good enough for most apartments.

    Here is an article I ran across that explains some of this better than I can.
    http://www.spendonlife.com/answer/will-my-landlord-run-a-rental-credit-check" [Broken]

    And whoever posted about free credit reports from http://www.annualcreditreport.com" [Broken] is right, get your free report every year. You still have to pay for your score, but that is worth the money if you don't have any idea where you stand credit wise.
    Last edited by a moderator: May 4, 2017
  21. Sep 15, 2009 #20
    So they received my information and the letter from my employer and called my employer to verify my income. Then they asked my employer to send them copies of my two most recent pay stubs which I did not have and apparently my employer did not have either. Instead my boss sent them a copy of the portion of the payroll with my pay listed along with copies of my secondary checks for "mileage". He then called them up on the phone, discussed this all with them, made sure they understood how to read the payroll documents, and assured them that I always make the same amount of money each month for my "mileage". They apparently told my boss that this was acceptable and he relayed this to me. I called up the management company and they said the screening company wanted copies of my two most recent pay stubs.....:cry:

    By this point it had already taken so long that it was only going to be a couple more days until I had two recent pay stubs so eventually I had those and just to be on the safe side I went to my bank and had them print out a statement for my last two moths account activity so I could show them my deposits. For some reason my bank will not produce account statements that only show deposits but fortunately they were all in one place on one page so I only had to send one for each month instead of my whole checking account history for two months (I use my debit card a lot).

    I turned it all in and a few days later they have finally accepted my application, over two weeks after I applied. I did wind up getting even more run around, which I will spare you all the details of, and I will have to wait until the end of the week before I can move in but its finally done and I wont have to continue living in my car and hotel rooms much longer. YAY!
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