When it comes to tenant screening, it’s essential for landlords and property managers to look into the credit history of their rental applicants, specifically their FICO scores. Knowing the potential tenants’ credit history can reveal their reliability when it comes to making timely payments to creditors and meeting financial obligations.
Take note, however, that a credit report or FICO score shouldn’t only be the sole basis of whether or not you’ll accept the rental applicant. In short, they should be part of a more comprehensive tenant background check procedure. FICO scores and credit reports help alert property managers of any financial delinquencies of the potential tenant. Such red flags are something that any rental business managers shouldn’t ignore, as these delinquencies could happen in the future when the applicant is already renting the property.
In general, FICO scores below 625 represents an elevated risk to the landlord as it pertains to receiving prompt rent payments. Furthermore, landlords and property owners typically consider FICO scores in the 600s to be a fair score when they look into tenant background screening reports. This doesn’t mean, however, that a rental applicant with a credit score of below 600 couldn’t be a perfect tenant. But in any case, low scores can send red flags that anyone managing or owning a rental business should not ignore.