Landlords: Link tenants' rent payments with credit scores
Americans are currently renting at a greater rate than any seen in the past 50 years, according to the Pew Research Center. As such, landlords in control of in-demand properties have quite the lucrative opportunity on their hands. Understandably, they'll also want to strongly protect such an investment by being judicious about the people to whom they rent their units. But while it might be true that one can't be too careful in the property business, the methods of evaluation for this due diligence might not paint the full picture of would-be tenants' creditworthiness.
"Traditional credit scoring doesn't offer the most accurate evaluation of many modern renters."
Furthermore, if limiting oneself to FICO, VantageScore or any of their traditional credit scoring variants, landlords could be depriving tenants of a chance to build their credit and financial standing. Using the PRBC Mainstreet credit decisioning solution instead can be beneficial to tenants and owners alike. Let's find out how:
Scoring outside the box
Like the classic credit scores, PRBC uses a range in the hundreds - 100 to 850 instead of FICO's 300 to 850 - but the methods' similarities largely stop there. The payments that form its bread and butter, so to speak, are expenses nearly everyone accrues and pays regularly, figures that indicate responsible spending and income if paid over time. These include:
- Utility bills.
- Internet, phone, mobile and cable payments.
- Rent-to-own agreements.
- Insurance payments.
- Student loan payment plans.
- Monthly rent.
Benefiting tenants and lenders
Landlords can submit an application to receive and use PRBC's alternative credit data, which can then help owners develop a comprehensive picture of prospective tenants' financial situations. It can identify reliability in someone who has a middling-to-low traditional score - and, conversely, find red flags of debt for applicants who present reasonably well on FICO. Once they become your tenants, individuals can use PRBC themselves to improve their credit status with each month of rent they pay.
Rental property owners must protect their bottom lines - that's more than sensible. But with PRBC, they can kill two birds with one stone and ensure that protection, while also offering more opportunities to the hardworking individuals whom classic credit models sometimes overlook.