Credit reports can be a difficult task for most to read. Through the years we have developed a quick and easy way to scan through a credit report easily. Given the length of these reports sometimes, most landlords will just look at the credit score. You should always ask someone who is going to rent your property for a full credit report. It will give you important information regarding the persons current financial situation.
– Confirm that the name and address on the credit report matches the name and address listed on the tenant application form.
– Confirm that the employment listed is accurate.
– Look at the actual score. Typically, you want to deal with applicants who have a score of 725 or above. Of –
course, it is important to take into account the type of the property and the rental rate.
– Look at the trade lines and compare the high credit limit to the balance amount. If the balance amount is significantly lower than the high credit, then this person is under leveraged, which is a good thing.
– If the balance due is close to the high credit, then that means that the person may be over leveraged.
– Also look at the payment status of each trade line. If it says ‘paid as agreed and up to date’, then this means that there are no recent late payments.
– The ‘Collection’ section will inform you if the tenant has any accounts in collections or any bankruptcy or consumer proposal histories.
Make sure you spend the time to go through the credit report as it is a peephole into the financial life of your prospective tenant and typically people who have good credit make good tenants, but do your due diligence and carefully screen the tenants until you are comfortable enough handing over your home to them.
If you want to learn more on how we screen our tenants then follow this link.