Thursday, July 15, 2010

Time To Look At The Credit

Last month we talked about the income of your applicant. I wanted everyone to focus on how important it is to make sure they have enough money to pay the rent. Now that we know they have the money, lets look at the next step in screening your applicant. Yes, it's time to talk about credit.

The credit information is valuable if you use it as a part of the overall screening process. The reason we want to look at an applicants' credit is to review their payment patterns. An applicant with poor payment patterns has demonstrated that they are a greater financial risk.

When looking at the credit report you should look at the credit score, percentage of delinquencies, collections and bankruptcy records. This information can be used to paint a picture of your applicants' credit worthiness. Make sure you have credit criteria established so you can qualify each applicant using the same standards. If you don't know how to read a credit report, you should look at a scoring model like Insta-Chek to help you analyze the credit report.