Landlord Credit Bureau Is Helping Landlords Find the Right Tenants-Even If They Have Limited Credit History
TORONTO, ON / ACCESSWIRE / September 27, 2021 / Landlords often find themselves faced with multiple applicants for highly-desired properties. In such cases, the deciding factor often comes down to something concrete and quantifiable, such as applicants' credit histories. Unfortunately, renting to someone with little or no credit history can pose known and unknown risks and challenges for landlords.
This means many renters find themselves in a tough spot-especially those who are new to credit or new to the country. Perhaps they are ready to begin a new chapter in their lives and start building credit, but finding a suitable rental property could be difficult, due to their lack of credit history.
Credit reporting agencies aim to provide the most useful information possible. As Equifax highlights: "Credit scores are intended to help lenders, creditors and others make fair decisions on whether or not to "take a risk" on someone. The risk might involve giving that person a loan (will they repay it?), offering a credit card (will they make timely payments?) or approving their apartment rental application (will they pay their rent?)…Unfortunately, credit scores alone cannot serve all renters equally well-particularly those who are starting over…Those with credit scores below 660 may be less likely to qualify for better loan terms. Those with lower scores who fall into the ‘poor' credit range (generally below 560) are more likely to have difficulty getting credit or qualifying for better loan terms."
These scores are determined based on the information available to the agencies; regrettably, those without hard data proving their reliability tend to fall through the cracks. As a result, landlords miss out on good tenants, and applicants struggle to find suitable rentals.
Fortunately, Landlord Credit Bureau assists both renters and landlords. LCB allows renters to include their previous rental payment history in their Equifax credit reports. In turn, this helps landlords form more extensive insights into their applicants' financial histories.
Finding the Right Tenants
Landlords need to consider many factors when renting to new tenants, including:
- Credit score and history
- Income compared to rent payment
- Employment history
Whether they find themselves in a new part of the world or a new stage in their lives, it can be challenging for those who are just getting started to rent a home or apartment without a solid credit history. However, that doesn't mean they have no history at all. Most applicants have purchased, leased, or rented something at some point. Landlord Credit Bureau helps landlords see applicants' previous rental payments, allowing them to make more fully informed decisions before making lease offers.
Why Credit Scores Don't Tell the Whole Story
One of the first steps a landlord should take when considering a tenant is reviewing their credit profile. As luck would have it, landlords are able to pull credit reports using Landlord Credit Bureau. While this may not tell an applicant's entire story, it is an important first step in a landlord's search for the right tenant.
An otherwise excellent potential tenant could have a poor credit score due to identity theft, poor financial decisions in the past that have since been corrected, or even job loss. Such a credit score will not tell you about a candidate's positive attributes, such as having never missed a rent payment at their previous property. Rent reporting with Landlord Credit Bureau allows landlords to see a more complete picture that can help them decide whether an applicant is a good fit for a lease on their rental property.
How Landlord Credit Bureau Can Help
Landlords want to find the right tenants, but being dependent on credit scores as the deciding factor when figuring out whether to offer an applicant a lease, they can miss out on vital information that could inform their decision.
When landlords and tenants use Rent Reporting from Landlord Credit Bureau to share a renter's past payment history, future landlords can evaluate prospective tenants on more than just credit scores. Some tenants-including those who are new to or rebuilding credit history, or who are new to the country-may have a long-standing record of paying rent on time. With Landlord Credit Bureau, a tenant's payments habits are part of their credit report and can demonstrate a pattern of consistent, on-time payments. This outcome isn't theoretical or marginal; as LCB CEO Zac Killam states, "For most of Canada's renting population, paying rent is their single largest expense each month; renters who use Landlord Credit Bureau's renting reporting have had 40+ point jumps in a matter of months."
Landlord Credit Bureau helps both tenants and landlords. When tenants have an opportunity to include their rent on their credit report, landlords can see a potential tenant's payment habits and make a fully informed decision. Renters also benefit, as they are able to build on their credit history with what is probably their largest monthly expense.
Put simply, a credit score tells a lot about someone applying to rent, but a landlord needs the whole story to make the best decision possible. Landlord Credit Bureau offers a mutually beneficial opportunity to provide landlords the most relevant insights possible into who their best tenants will be. That's better than just hearing the score; that's the whole ballgame.
Zac Killam, CEO
Landlord Credit Bureau
SOURCE: Landlord Credit Bureau