3747: Yes, You Need A Credit Report AND A Credit Score To Rent An Apartment! by Sam of Financial Samurai on Building Good Credit

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[00:00:53] This is Optimal Finance Daily. Yes, you need a credit report and a credit score to rent an apartment by Sam of FinancialSamurai.com. And I'm Justin Malek reading articles to you every day of the year. So with that, let's get right to it as we optimize your life.

[00:01:19] Yes, you need a credit report and a credit score to rent an apartment by Sam of FinancialSamurai.com. Looking to rent an apartment in a hot market? You need a credit report and a credit score to be considered by landlords. I've been a landlord since 2005 in San Francisco, and I always ask for a credit score and a credit report. These two pieces of information are basic.

[00:01:47] The competitive rental market. When I hosted my open house for one of my rentals last fall, the demand was overwhelming. Over 50 parties showed up, and by the end of the day, I had 20 applications on my dining table. Each application contained at least one bank statement, an earnings statement, a letter of reference, sometimes a resume, and of course, their latest credit score.

[00:02:13] My asking price was $3,300, which in retrospect was probably $200 a month too low given the amount of demand I received. I felt too guilty raising the price after the advertisement, so I let it be hoping someone would offer more instead. The good thing about so much demand is that I got to be more picky.

[00:02:35] Because nothing is worse than having a problem tenant who always complains, makes a lot of noise, and is always late on rent. Thank goodness I haven't had one of these types of problem tenants yet, and I don't ever plan to have one if I maintain a disciplined approach to screening. With so many applications on the very first day, guess which document I looked at first to screen? The credit score report, of course.

[00:03:02] You need a credit score and credit report to rent an apartment. About seven of the 20 applicants had a credit report, but no actual credit score. I was flummoxed, wondering whether the report was missing a page. It turns out that the applicants used a service that provides one's credit history, important for fraud and false reports, but no actual score by which to judge.

[00:03:29] Thanks to the comments on the post, who should check their credit scores, I finally realized what these reports were. At the time, I thought providing a credit report with no credit score was very fishy and annoying, frankly. As a result, I put those seven applicants in the bottom group. Don't they want to know what their credit score is at least? I kept thinking to myself.

[00:03:54] I then separated the rest of the applications between those who had a credit score over 720, good enough for me, and those who did not. Best group, nine applicants all with credit scores above 720. Middle group, four applicants with credit scores between 680 and 719. And bottom group, seven applicants with good incomes but no credit scores, just reports.

[00:04:24] After spending several minutes sorting out the applications by credit score, I then looked at income, assets, occupation, and any letters of reference from the best group first. With nine applications in the best group with credit scores over 720, the other 11 applications really had little chance, unfortunately. Landlord's perspective when evaluating credit scores.

[00:04:50] If there are nine applicants with 760 credit scores, $80,000 in liquid assets, who all make over $150,000 in income, why would anybody choose another applicant with a 680 credit score with the same income and assets? Sure, the applicant with a 680 credit score might be really thoughtful and nice, but so are the other applicants.

[00:05:15] You can't risk going with a lower credit score applicant unless that's all you've got. One of the applicants was a third-year cardiologist who made $320,000 a year. Unfortunately, he only had a 675 credit score because he whiffed on his medical school payments. No thank you, buddy. I don't care how much you make if you don't pay your bills. The credit score is a window into one's soul.

[00:05:46] Just like how employers screen the first cut of applicants based on grades, landlords do the same with credit scores. If you're one of those job applicants who purposefully omits their GPA on their resume, like the seven applicants who included a report but had no score, you're going to be looked at with suspicion. Your other criteria will be highly scrutinized to the point where the landlord or employer will find reasons not to choose you.

[00:06:15] Don't provide a credit report without a credit score. If you do, it would drive your landlord nuts. Spend the time to find out what your credit score is before you even bother applying. Landlords don't have time to go through every single line item in your credit report. They want that credit score and any explanations you care to add. The credit score is the first thing landlords look at in a tight rental market.

[00:06:43] Having a credit score is much better than having a credit report with no score. Don't let landlords start wondering what else you may be hiding. Finally, if you don't want to provide your credit score or credit report, that's fine as well. Just know that your landlord may decide not to accept you as a tenant. Nobody's forcing anybody to do anything on both sides. If you want a tenant bad enough as a landlord, you may let things slide.

[00:07:12] If you want the apartment bad enough as a tenant, you're going to do everything possible to prove you are a creditworthy person. You just listened to the post titled, Yes, you need a credit report and a credit score to rent an apartment. By Sam of FinancialSamurai.com. And I'll be right back with my commentary. Many leaders think they know where time goes.

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[00:09:03] or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. Thank you to Sam. I can understand wanting a quick way to sort through 20 applications, but the part odd question is treating a missing score as a sign that someone is hiding something.

[00:09:31] He says he didn't initially realize those reports could come without a score. If the person reviewing applications can misunderstand what's in the document, I think an applicant deserves the right to misunderstand it too. And that makes me wonder how clearly the requirements were explained before anyone applied. I don't know what his listing said, but if a particular document is going to determine whether someone gets considered at all, I'd want that spelled out ahead of time.

[00:10:00] Otherwise, you might be judging how well someone guessed what you wanted. So maybe a lesson here is, if you're applying for an apartment, I'd ask for the complete list of required documents before putting everything together. And if you're the one reviewing applications, a missing item could be a reason to ask a question before making an assumption about the person. But that'll do it for today. Thank you for being here and listening every day, and I'll see you tomorrow as usual,

[00:10:29] where your optimal life awaits.