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Does Section 8 Check Your Credit? Credit Scores and Rental Help

By KPCB StaffCombined Expertise In The Low Income Housing Space For 10 Years · How we write our guides

credit score

A low credit score is not on HUD's list of reasons you can't get a Section 8 voucher. Your housing authority looks mainly at your income, family size, citizenship or eligible immigration status, and a few rental and criminal history rules. The bigger credit hurdle comes later, when a private landlord screens you before signing a lease.

That means your credit can still matter a lot. Knowing what each side checks, and fixing errors on your reports early, can save you from losing a unit while your voucher clock is running.

What the housing authority checks

For the Housing Choice Voucher program (Section 8), HUD says eligibility depends on your family's annual income and size. Most families must be extremely low-income or very low-income. Applicants must be U.S. citizens or eligible non-citizens, and the head of household needs a valid Social Security number. Some crimes can also make an applicant ineligible.

Credit score is not one of those requirements. Money you owe a housing authority is a different story. Under the federal rules for vouchers (24 CFR 982.552), a public housing agency (PHA) may deny you if:

  • your family currently owes rent or other amounts to any PHA for Section 8 or public housing
  • you haven't paid back a PHA for money it paid a landlord for rent or damages you owed
  • you broke a repayment agreement with a PHA
  • anyone in the family was evicted from federally assisted housing in the last five years

The same rule lets a PHA offer you a repayment agreement for money you owe it. If an old housing authority debt is in your way, ask about one.

A PHA may also choose to screen applicants for "suitability for tenancy," but it has to follow the policies in its own Administrative Plan (24 CFR 982.307). Policies differ from one agency to the next, so ask your PHA directly whether it pulls credit. You can find yours in HUD's PHA directory. For more on the criminal and rental history side, see our guide to what Section 8 looks for in a background check.

Public housing works differently

In public housing, the housing authority is also your landlord, and it does the tenant screening itself. Federal rules (24 CFR 960.203) let it consider "an applicant's past performance in meeting financial obligations, especially rent," along with past damage to property, disturbing neighbors, and certain criminal activity.

If the PHA finds something negative, it must consider how long ago it happened, what it was, and how serious it was. It may also weigh signs that things will go better this time. So late rent from years ago, with a clean record since, is not the same as an eviction last year. Our guide to public housing vs. Section 8 explains the other differences.

Applying for either program is free. HUD's Office of Inspector General warns that housing authorities and government agencies "will never ask you to pay for admission to housing assistance programs or to join a waitlist." Only the housing authority decides whether you are eligible.

What a private landlord can check

Once you have a voucher, finding a unit is your job, and the landlord picks the tenant. HUD's rules say plainly that "the owner is responsible for screening and selection of the family." Your PHA must tell the landlord this before it approves the lease.

Under 24 CFR 982.307, a landlord may look at your history of:

  • paying rent and utility bills
  • caring for a unit
  • respecting other residents' right to peaceful enjoyment of their homes
  • drug-related or other criminal activity that threatens others' health, safety or property
  • following other key lease terms

The PHA must give the landlord your current and prior addresses and, if it knows them, the names and addresses of your current and prior landlords. It may share other information it has, such as your tenancy history. The PHA has to give you a written statement of its policy on what it shares, and it must give the same types of information about every family to every owner.

Tenant screening reports

Many landlords buy a tenant screening report. The Consumer Financial Protection Bureau (CFPB) says these reports may include:

  • your credit report
  • rental history, including eviction cases and lawsuits
  • employment verification
  • criminal history and sex offender registry checks
  • a score or recommendation based on the landlord's own criteria

A tenant screening report is a different thing from a credit report, and it can pull from more sources. According to the CFPB, a lawsuit or judgment can be reported for seven years or until the statute of limitations runs out, whichever is longer. Eviction cases can stay for up to seven years. Bankruptcies stay for 10 years, and criminal convictions have no time limit.

Extra hurdles for voucher holders

HUD says some landlord practices against voucher holders can be "source of income discrimination." Examples include refusing vouchers, adding extra screening rules or reference requirements only for voucher holders, charging a bigger deposit, or ignoring the voucher payment when deciding if you earn enough for the unit.

These protections vary by state and city. Some places ban this kind of discrimination and others do not. Ask your PHA or a local legal aid office what applies where you live. Our guide to landlord and tenant rental housing rights covers your rights more broadly.

Will applying hurt your credit score?

It depends on the type of credit check, so ask before you apply. The CFPB explains that hard inquiries can lower your score because most scoring models look at how often and how recently you apply for credit. Soft inquiries, like checking your own report, do not affect your score.

Some landlords also charge application fees, which HUD tells voucher holders to budget for, along with a security deposit. Applying to many units at once can get expensive. Ask each landlord about its fee and screening rules before you pay.

Having a voucher or living in public housing is not a credit account. The CFPB's list of what goes on a credit report covers personal information, credit accounts, collections, public records like bankruptcies and judgments, and inquiries. Housing assistance is not on it. The landlord will still know you have a voucher, because the PHA has to approve the lease and pays part of the rent directly to the owner.

Rent you don't pay can hurt you, though. Unpaid amounts sent to collections can show up as collection items, and an eviction case can appear on a tenant screening report.

Steps to take before you start looking

You can do most of this while you wait on the waitlist. If you have already applied, our guide on confirming your Section 8 application is on the waitlist helps you check your status.

  1. Get your free credit reports. The CFPB says you can get a free report from each of the three nationwide credit reporting companies (Equifax, Experian and TransUnion) once a week at AnnualCreditReport.com, or by calling (877) 322-8228. This is the free source the CFPB points to. You may also qualify for extra free reports if you receive public assistance.
  2. Check every line. Look for accounts that aren't yours, debts you already paid, wrong balances, and old items that should have dropped off.
  3. Dispute errors in writing. The CFPB's dispute steps say to contact the credit reporting company and the company that supplied the wrong information. Include your full name, address and phone number, each error and its account number, why it's wrong, a copy of the report section, and copies (never originals) of your proof. Furnishers generally must investigate and respond within 30 days.
  4. Deal with any debt you owe a housing authority. Ask the PHA about a repayment agreement, and keep every payment receipt.
  5. Gather proof that helps your case. Rent receipts, a letter from a past landlord, and proof of steady income can help a landlord look past a low score. If you have an old eviction, a short, honest letter explaining what happened and what has changed may help. It is up to the landlord how much weight it gives these.

If a landlord turns you down

If a landlord denies you because of a tenant screening report or credit report, the CFPB says federal law requires the landlord to give you an adverse action notice. It must include the name, address and phone number of the company that made the report and your right to a free copy if you ask within 60 days. It must also tell you about your right to dispute wrong information.

Then:

  1. Ask the landlord what in the report was the problem.
  2. Request your free copy from the landlord or the screening company within 60 days.
  3. Check it for wrong or outdated information.
  4. Dispute any errors with the screening company or credit reporting company. They generally have 30 days to investigate, sometimes 45, and some states set shorter deadlines.

If a problem isn't fixed, you can submit a complaint to the CFPB online or call (855) 411-2372. If you think you were turned down because of race, color, national origin, religion, sex, familial status or disability, you can report housing discrimination to HUD. For free legal help, search for a legal aid office at LawHelp.org.

Keep looking while you sort out a denial. HUD says your voucher will have a search time of 60 to 120 days, set by your PHA. If you are running out of time, ask your PHA for an extension before the voucher expires.

Frequently asked questions

Does a bad credit score disqualify me from Section 8?

No. HUD's eligibility rules for vouchers are based on income, family size, citizenship or eligible immigration status, and a Social Security number, plus some criminal and rental history rules. Owing money to a housing authority can lead to a denial, though. Use our benefit finder or the guide to Section 8 income eligibility to see where you stand.

Does public housing check credit?

The PHA screens public housing applicants itself and may consider how you have handled financial obligations, especially rent. Each PHA sets its own screening policy within HUD's rules, so ask yours what it reviews.

Can a landlord refuse my voucher because of my credit?

A landlord can screen you on your rent and bill-paying history like any other applicant. HUD says tougher screening rules applied only to voucher holders can count as source-of-income discrimination, but whether that is illegal depends on your state and city. Ask your PHA or legal aid whether those protections exist where you live.

Will a landlord's credit check lower my score?

A hard inquiry can lower your score, and a soft inquiry does not. Ask the landlord or management company which kind they use before you apply.

Does my Section 8 voucher show up on my credit report?

No. Housing assistance isn't on the CFPB's list of what credit reports contain. Unpaid rent sent to collections, or an eviction case, can show up on your credit report or a tenant screening report.

How long does an eviction stay on a tenant screening report?

The CFPB says eviction cases could stay for up to seven years. For voucher eligibility, a PHA may deny you if anyone in your family was evicted from federally assisted housing in the last five years.

Sources

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