Rental payment history may be a more valuable metric than credit history in telling good rental prospects from bad.
Forget adjusting your credit parameters—apartment screening firms say rental payment history, not raw credit scores, has emerged as the preferred metric for approving apartment prospects during the screening process. While credit history is still an important consideration for leasing agents looking to approve would-be renters, screening companies suggest that, in some cases, it could be more beneficial to NOI and asset value if approvals are granted to prospects with stellar payment histories, even if their overall credit is lousy.
“Rental history is the most exciting data set we have. The end-all be-all and best predictor of how someone is going to pay their rent is how they have paid it in the past,” says David Carner, president of Carrollton, Texas–based RealPage’s LeasingDesk resident screening and rental insurance division. “The goal is to try to replace the people whom you’ve rented to [who have] good credit but a checkered payment history with people whom you probably wouldn’t have rented to because of sketchy credit but [who] for the last 18 months have paid their rent in full and on time every single month.”
Read more...Cash or Credit? - Rent Trends, Technology - Multifamily Executive Magazine