Applicant without a Credit Score

by Andrea West

Posted on 2017-06-26 12:56:45

Marion owns five duplexes. One of her units is vacant and already rental applications are coming in. This seems promising - it shouldn’t take too long to fill the unit - but she notices that the first family to apply doesn’t have a credit score. They pay for everything in cash.

That seems strange, she thinks to herself. Who in the twenty-first century uses only cash?

What does she do?

This scenario does happen. Some people don’t have a credit score because they’ve never used credit. Others are young and just getting started with their credit score. There are many landlords who won’t consider renting to someone without this piece of information, but just because someone lacks a credit score doesn’t mean they will be a bad tenant. Remember, the credit score isn’t everything, so if you come across this situation, like Marion did, here are some tips you can follow-

  • Make sure that all of the information has been filled out on the application. Since they are missing a piece of information that landlords like to use when selecting residents, you will need to be more diligent in checking other resources that you do have.
  • Still run a background check and screening on them. Screenings give you a lot more information than just the credit score. The Smart Housing Smart Score takes many of these into account, such as Social Security Number verification and a list of past evictions. You can also see if they have any criminal or public records.
  • Be sure to check their references - employment, personal, and previous landlord.
  • Interview the applicant(s). This can be useful to help you get to know the applicant and have a chance to ask them about concerns you may have. You can also use the interview to determine if there are any inconsistencies with what they included in the application and what they tell you in person.
  • Barb, author of The Landlord Chronicles, also likes to visit potential residents at their current address. During her visit she can interview them and see how they treat their current residence.

 From Marion’s own experience, she knows that even if an applicant does have a good credit score, that doesn’t mean they will be an amazing tenant, so she decides not to rule out the family that deals only in cash right away. She will give them as much a chance as the other applicants and follow these steps. In fact, these steps would be useful to follow with any applicant as they give information that is pertinent in deciding who would be a good resident.