Credit Scores and Rental Applications

29 Jan Credit Scores and Rental Applications

Worried about placing an application on a rental you would love to live in but feel your credit score will not suffice? Don’t be afraid, most landlords are happy to work with applicants as long as they are upfront and can provide other references from current and previous landlords. We tell our owners that a good tenant is not just a number on a report but involves a lot more. We have had plenty of individuals whose credit were excellent and turned out to be difficult renters, just like we’ve had tenants with somewhat blemished credit who were a joy to have as part of our rental family.

The truth is agencies and landlords that place too much emphasis on a person’s credit score could potentially miss out on the “perfect” tenant because they are only considering one aspect of what makes good tenants. Remember, people’s credit scores get impacted because someone reported past due payable items to the credit bureau. Yes, rent can be of those items but the process of getting that reported and listed on someone credit is very difficult and time consuming. Unless landlords go through a formal eviction and judgment process in court, outstanding rent payments might never reflect on someone’s credit. This means you could have a tenant who is perhaps disputing something with their landlord and therefore decides not to pay rent and potentially moves out while still owing rent payments. Unless the landlord goes through the lengthy process of court appointments to collect the debt, these tenants could potentially walk away without any negative repercussions to their credit score.

More reputable real estate agencies will use the following items to get a more complete picture of any applicants, which allows the landlord to make a decision based on multiple factors:

1. Credit Report from one of the 3 major bureau – Equifax, TransUnion, Experian

2. Current and previous landlord references

3. Employment & Income verification

Of course there is no magic bullet to produce the perfect tenant but a bit of upfront investigation on each applicant could potentially reduce trouble down the road! Tenants with worrying credit scores should take the steps to offer additional references to counter what may show on their credit report.

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