Today, we wanted to do have a quick review on credit checks and why credit reports are so important.
Credit reports are a very important tool that use and apply when sourcing quality tenants for our clients. A credit check is performed by a consumer credit agency such as Equifax or TransUnion. These agencies perform checks which we use to review potential applicants past credit and financial history. On these reports, things such as existing trade lines, credit lines, bad debts, loans, judgements etc can all be found. History as far back as 7 years are found on the reports and the information provided can prove invaluable. When reviewing the report, a ‘score’ is generated which the bureau has given the consumer as a measure of their creditworthiness.
We look for a minimum score of 700 as a baseline of what we would deem acceptable. Most applicants that we process usually pass with no issues but we do run into plenty of potential applicants who will have items of note that may impact their application. Past judgements, bad debts, collections are what we look out for specifically as it can paint a blunt picture of the applicants lack of financial discipline and allude potential problems in paying rent going forward. Credit reports can be useful tools as they can also confirm things such as previous registered addresses, employment status and fraud detection alerts.
For these reasons, we always run reports on each application we receive as its one of the four main items we look into when assessing tenants for our clients properties.
If you have any questions about credit reports or comments about the process, feel free to leave a comment down below! Stay posted for more real estate news which can always be found in our blog page at www.filerhttps://www.filerwelch.com/blog/
As always, give us a shout if you have any questions and thanks for reading Why credit reports are so important.
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