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Landlords Reduce Credit Score Requirements

By Sally Maison
Published: Wednesday, November 25th, 2009

As vacancies all over United States continue to go up, landlords can do nothing but bend the rules for their good and the good of consumers as well.

Landlords Reduce Credit Score RequirementsAn internet listing site noted recently that vacancies went significantly up when unemployment rates reached near-record high in several states. About seven in every ten landlords note that they have seen higher vacancies this year, prompting them to find more ways to fill up empty units. This includes lowering the credit score requirements for renters.

While many people may not know it, landlords are actually using the credit score of renters to determine their rates. Some are even denied application for tenancy because of their credit rating.

Amanda Coats, a landlord from Hilltop Garden, says she is screening an applicant who just lost her home due to foreclosure and is looking at her credit history before making any decision. She adds that she does not decide based on the credit score after foreclosure since a consumer’s rating is expected to plummet after losing her home. But Coats did say that she will approve the applicant if her credit score is good three or four years before she was foreclosed upon.

The recent survey also reveals that 78 percent of property owners saw a decline in the credit rating of would-be tenants. Lance Miller, who owns several apartments, confirms the findings of the internet listing site. He says only one in every 30 potential tenants have a credit score of 650 or more. He says seeing a credit score of 700 is quite rare these days.

Specialists explain that having an excellent credit rating is fast becoming a rarity because of the rising number of foreclosures. Ironically, the rising number of foreclosed homeowners has caused vacancies to be filled up.

But the increase in vacancies is not the only reason why landlords are bending some rules. Miller contends that the drop in the value of homes is another major factor in his decision to decrease rent. He says homes are become more affordable to many people so he had to decrease the rent for a three-bedroom, two-bath housing units from $1,000 each month to $925 to $950 a month.

He explains that if an owner does not lower his rent, his property will remain vacant. He believes that people are looking to save more so they would look for cheaper places.

Landlords agree that they cannot utilize credit score as much as they were able to do so. They likewise say renting has become a transitional practice for homeowners who recently underwent foreclosure, adding that new changes have worked well for all of them.

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