How Landlords View Credit Scores

 

Your credit score is a very important piece of information that tells landlords a lot about your financial stability. This three-digit number gives them insight into your spending habits, how you handle debt, and your history of paying down your debts on time. With this information, they can make an informed decision about whether or not they want to rent their property to you. Every landlord will have different requirements when it comes to the minimum credit score they’ll accept on rental applications. It’s important to know what landlords are looking for and how your credit score impacts their rental decisions.

Credit Scores: The Numbers

Credit scores can range from 300 to 850, but typically, any credit score over 670 is considered good. It’s important to remember that this number is not the same in all areas and all rental markets. A score of 670 does not guarantee you will be approved for a rental in all places, and a score below this number does not mean you won’t qualify anywhere. If your credit score is in the low 600’s, your landlord will probably request more information to learn more about your income, debt, and repayment history.

 

Most landlords will look at your credit score along with other data to help them make a decision. They will want to see how much you make, so they can calculate your monthly income vs. the monthly rental rate. This will help them see that you make enough to pay the rent on time.

 

Detailed Credit History

Landlords who want a more detailed credit history may use a search tool that allows them to see your previous bankruptcies and evictions. If you have either of these on your record, it may raise red flags to the landlord. This more in-depth check will also reveal your criminal history, and some landlords are hesitant to rent to someone with a lengthy criminal record.

 

Almost everyone has fallen behind on a rent payment before. These small blemishes on your credit history should not significantly impact your credit score. Your credit history doesn’t have to be perfect, and most landlords are willing to look past a few past mistakes. An eviction, however, is difficult for many landlords to ignore, especially if it is paired with a rocky financial history.

 

Ways To Improve Your Credit Score

If your credit isn’t great, there are still ways that you can rent a home. One of those ways is by offering to pay a higher security deposit or to pay a few month’s rent upfront. This shows the landlord that you’re willing to be flexible, you’re a serious tenant, and gives them financial stability upfront.

 

Another thing you could do is offer the landlord a list of referrals. Give them the contact information of people who can vouch for you; people who know you and your work ethic and your dependability. Maybe they can even confirm that you went through a tough spot financially, but that you’re trustworthy and responsible now. You could also have someone cosign for you, so that the landlord has peace of mind that the rent will be paid, regardless.

 

If you are actively looking for a rental property and know your credit history isn’t the best, you can be proactive by paying down debts, avoiding big purchases, keeping your job, and not taking out any new loans. These small steps can slowly but surely raise your credit score. High credit scores don’t always mean you’ll get a better rental rate, but they may help with things like negotiating a lower security deposit or more flexible move-in rates.

 

How Benefit National Property Management Can Help

Landlords will be looking at your credit score, so all prospective tenants should be working to raise their score. Many landlords hire professional property management companies to take care of this aspect of their investment, along with conducting tenant screening and background checks, rent collection, everyday tenant communication, and avoiding evictions during a pandemic. Want to know more about these professional property management services? Check this out.