What is a good credit score for a tenant? This is a question many would-be landlords find themselves asking. And it’s understandable – especially when a landlord hasn’t managed properties extensively before. If you’re wondering how to tell what is a good credit score, here’s everything you need to know.
There is no official law determining how high or low a tenant’s credit score can be for them to obtain property. There’s also no official record that lays out the average credit scores of a renter. This is because renters aren’t required to report their credit scores the same way homebuyers are. While there are guidelines that many landlords operate by (for example, not renting to people with credit scores below 650), the decisions here are largely up to you.
This is also up to a landlord to determine when screening a tenant. The credit score a rental company will or will not accept depends largely on two factors: the location and quality of the rental. These two factors play a massive role in the price of a rental and are two of the biggest things that impact whether or not a renter can get into a property. If the rental is one of low-quality in a poor location, most people abandon their requirements surrounding credit score and rent to whoever they can get.
For high-priced, high-quality rentals, most landlords stick to the 650+ standard. Some landlords even look for a 700+ credit score minimum.
Landlords who are still wondering what is a good credit score can check out the additional information about these credit score ranges, and what they say about tenants:
In some cases, a landlord will run a credit report only to find that there is insufficient credit on a tenant’s credit report. This typically means that the tenant does not have enough credit to impact and create accounts. This situation is most frequent with students and young people, as well as older people who have gone years without credit activity. It’s also common for spouses who have nothing in their names. While no credit is not necessarily bad credit, it’s still risky to rent to these people.
Getting a tenant’s credit score is as easy as asking them to agree to a credit check. These checks are about $20-$50 and can be obtained through many simple platforms. Once obtained, the credit report will lay out details like foreclosures, back payments, missed payments, and more. People who have never run a credit report before and don’t want to deal with the process can consider hiring an apartment management company to handle the process for them. This is a great way to outsource this important task and ensure it’s done correctly.
Again, people who rent properties typically have a lower credit score than people who own them. This means that renters with scores of about 670 or above are already quite a bit above the national average. While it may seem overwhelming for landlords to understand and dig into tenant’s credit scores, this is an important part of being a landlord, and it’s an essential way for people to ensure they’re finding the top tenants available to them.
While some landlords are willing to rent to people with lower than average credit scores, it’s still generally unwise to rent to anyone with a score around 500. These renters are very high-risk, and will likely be more trouble than they’re worth when it comes to a rental.
Don’t want to worry about sifting through credit scores to find a renter that works well for you? Consider bringing in Blueground, instead. Blueground is an innovative new renting model for privately-owned apartments. Offering professional corporate apartment management, decoration, and cleaning, Blueground takes the headache out of finding the best tenants. As your primary tenant, Blueground takes care of finding senior business executives among other reliable subtenants, to ensure you have a steady monthly income.