Part of finding a good tenant is checking their credit. As a landlord, you have limited information from which you can make your rental decision, and checking a tenant’s credit can help you predict whether or not they’ll be able to pay their rent on time every month.
Cozy makes it easy to check tenant credit. We provide a detailed credit report that includes not only a credit score, powered by Experian, but also information about what issues might have lowered a tenant’s credit score.
Still, as a landlord, you need to make a judgment call on whether or not to rent your property to this applicant — numbers can only take you so far.
Here are some factors to consider:
How does the applicant’s score fare overall?
Here’s the VantageScore distribution from Experian’s website:
You can ignore the individual bars in the graph and focus on the overall trends. They represent different types of scores VantageScore tracks.
As you can see, about half of the population has a credit score over 700. If you include people scoring above 650, that’s around two-thirds of the population.
How old is your applicant?
There’s a connection between age and FICO score. If you’re renting property to younger tenants, they may not have built up enough positive credit history for a really high score yet.
Where is your property located?
Credit scores can vary by region, based on factors like employment rates and property values. Check out the averages for properties in your area using Experian’s map, and consider factoring in the region’s average credit score into your decision.
What factors impacted your tenant’s score?
With Cozy credit reports, you can see the issues that might have negatively impacted an applicant’s credit score at the bottom of their credit report. Some issues may not matter to you as a landlord, like having too many credit inquiries.
How much income does the tenant bring in?
Income is also an important factor to consider when evaluating a tenant. Use Cozy’s free online rental application to get an idea of their income, so you can be sure they’re making enough money to pay rent and have money left over every month for other expenses.
Can the tenant apply with a co-signer?
If a potential applicant’s credit score is low, but you think they’d be a great tenant, consider a co-signer, like a parent.