As a landlord, deciding who will be a good tenant for your property can prove to be and extremely challenging process. There are several key factors in making a tenant decision, but the most important one is determining whether or not the potential renter will be able to consistently pay their rent in a timely fashion. There are several determination factors to consider when making this final decision (the most important one being their credit score).
What is your applicant’s age?
FICO scores vary based on the consumer’s age. When you’re considering younger applicants as renters, it’s important to keep in mind that they may not have enough credit history to possess a higher score.
What has impacted the applicant’s score?
Take the time to review the credit report. Some factors that might have negatively impacted a score might not be relevant to you as a landlord (ie: the number of credit inquiries they’ve had.)
Is there a guarantor willing to cosign?
Maybe you feel the applicant would be a great fit but their previous credit history isn’t ideal. Considering a cosigner for the lease, which will provide a backup source of payment if your tenant does not follow through on their payments.
Whether you’re a landlord looking to rent your property, or a tenant searching for your next apartment, a person’s credit score is vital to any rental agreement. A landlord will likely infer the worthiness of a potential tenant through their credit score, which shows someone’s financial stability. Ideally, as stated in homeguides.com, a FICO score of 660 and up is the optimal credit score for a potential tenant to a property but can vary based on landlord preference. In a situation where an applicant has poor credit, a landlord might suggest a month to month lease agreement, a higher rental payment, or automatic payments.