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Newer laws make it more and more difficult for landlords to screen and reject, so landlords are depending more and more upon the credit report.
That means it is becoming more and more important for tenants to maintain a good credit report.
Just keep that in mind when you are working up the family budget.
100% correct. Credit score is my number one criteria. Rarely do I see someone with a decent credit score and a bad criminal record. I screen ~200+ tenants a year for a complex and have seen thousands of background checks over the years. It makes the most difference. Couples generally have a similar score, within 20 points or so. If they have a wide divergence, there will be issues nearly 100% of the time.
Credit score is color blind, and no one other than the applicant has an impact on it. Credit score distributions are readily available to see how much of the population is excluded by your criteria. If someone steals an identity of a dead person, the credit score is non-existent.
There are errors in many credit reports, however the errors are insignificant. They mostly do not impact credit score. Some help, some hurt, but generally do not impact by more than a few points.
I use a hard score criteria, 625+ for all people living in the unit 18+, that way I can screen all tenants the same. 1,000 people could look at my criteria, and a applicants score, and come up with the same conclusion.
Anytime I hear someone saying they look at various things in the report and make a decision, I wonder how they could put that in writing and have someone else look at the criteria and come up with the same result. I also wonder if they would pass a Fair Housing audit.
The leasing agents will tell you evictions are the most important, but they want you to overlook bad credit so they can get a commission. They won't be around when things go south. 625 is reasonable, if not higher. FHA loan credit score requirements are pathetically low, and do the opposite of their objective by making housing more expensive, not less.
The leasing agents will tell you evictions are the most important, but they want you to overlook bad credit so they can get a commission. They won't be around when things go south. 625 is reasonable, if not higher. FHA loan credit score requirements are pathetically low, and do the opposite of their objective by making housing more expensive, not less.
Exactly right. Many more people are told to leave, or they will be evicted, and they leave than are actually evicted. Or lease non-renewed. Or lease mutually terminated.
I would guess that for every eviction, there are another 5+ that moved before the eviction could be started.
In my state, evictions are erased from public online records after 3 years. And there are several laws in the pipeline that will erase criminal convictions after a few years. There are also laws in the pipeline that would make criminals a protected class, make it illegal to discriminate against people in housing and hiring based upon their criminal background.
So yes, it does make sense to weigh the credit report heavily, and ignore any story that a person with no or bad credit gives you, since it's more and more difficult to find out whether they paid the landlord, or have a history of drug dealing, or assaulting their neighbor, boss, or landlord.
I mean, I think most people choose to have bad credit scores. All while they're messing up their finances, they're thinking, "None of this will matter! Landlords don't really care about credit scores, right?"
I will both agree AND disagree with this. While credit score is important (I know...I'm a mortgage underwriter), it's truly not everything. Yes, some laws make it more difficult but I will use myself as an example...my credit score tanked in 2017 and is currently under 600 because my husband got sick and had to leave his job to recover making me the sole breadwinner. In our case, it was either keep a roof over our family's head or pay the credit card bills...guess which one we chose however we always paid our rent on time and our landlord would tell you that we are darn near perfect tenants (pay rent on time, keep the house orderly and never really call about any issues if we can fix them ourselves). My husband is now back to work and we are slowly working to repair the credit damage yet by your standard, a new landlord might completely reject us simply because of our credit score when we have a perfect rental history. It's not always black and white.
There are also those of us who lost everything in the recession. I was laid off at age 55, just as the recession started. Not realizing just how bad it would get, I used all my savings to pay my mortgage and bills.
I ended up declaring bankruptcy because all I could find were temporary low paying jobs. The sad thing was, I almost had the credit cards paid off, it was the mortgage that was killing me.
Since I was not the only one this happened to and I was fairly close to retirement age, I survived. But my credit score did suffer.
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