A lot of folks using Cozy are accidental landlords, and many have never needed to interpret another person’s credit report. Quite honestly, even when reviewing my own report, I was mostly focused on the score — but, when you’re evaluating a potential tenant, you need to look closely. Fortunately, Cozy makes it easy to review a credit report, even if you’re doing so for the first time.
Let’s take a look at the different pieces of information you’re provided with, and how you can use them. But first, if you haven’t run a tenant credit report yet, use Cozy. It’s free for landlords like you, and just $19.95 for your applicants.
Here’s a top-level summary of your applicant’s debts and credit lines along with their credit score. This will tell you their total existing debt, plus the percentage of available credit they’re currently using.
This is where you’ll find a breakdown of your applicant’s total monthly payments and total debt. Knowing how much your tenant already owes each month may give you a better idea of whether they have enough income to comfortably cover rent. I’d also recommend paying close attention to their total debt ratio. Some applicants may have a large total debt, but a big portion of it may be things that are considered good debt, like student loans.
Next you’ll find your applicant’s overall payment history. This will tell you things like when they last made a late payment and the number of accounts currently in collections. Accounts Ever Late and Time Since Late may give you a good indication of this applicant’s likelihood to pay their rent on time every month.
Next you’ll see a more comprehensive display of your applicant’s account history. Here you’ll be able to view up to 25 months of payment history for each account. I’d recommend looking out for consistently on time payments, which suggests that this applicant is accountable for their financial obligations.
Finally, you’ll see a list of factors that could have lowered your applicant’s credit score. We’ll give you a brief explanation of each one, but you can also check out www.reasoncode.org for a more in-depth rundown.