Rental History is Becoming a Key Criterion for Approving Leases

Rental history is judged by many landlords to be a reliable measure in choosing whether to extend a new lease.

Here’s some important news to be aware of if you are a renter or a potential renter.

The apartment leasing industry (also known as the multifamily industry) is increasingly using a new metric besides the credit score to help determine whether they should offer a lease to a prospective renter.

Rental history is becoming a key criterion for approving new leases, and it is judged by many landlords to be a very reliable measure.

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Why is rental history so important?
In the apartment industry, one typical way that financial behavior is gauged is to check credit reports for renters. If these reports indicate responsible spending alongside other positive qualifications, then offering a lease ought to be a reasonable bet.

Good credit is still the gold standard, but now, checking whether residents have historically paid their full rent amounts — on time — seems to be a key to reliably suggesting that those renters will continue to do so and should be cleared for new leases.

The addition of rental history data has come about as new technology and credit company connections have emerged to make renting history easier for landlords to access. Credit bureaus, in fact, are often the agencies which collect and share this rental history data. With rental history added as a part of credit considerations, it can help support an individual’s overall picture as a reliable spender.

Check your own rental history
This change suggests that even if renters have experienced credit difficulties, they may still be eligible to rent IF they also have proven that they can pay rent on time every month for a period, likely for the length of a past lease. For renters in this situation, this should be heartening news.

So, how can you double-check your rental history and ensure that your records reflect a good standing? You might wish to check in with the same reporting agencies a potential landlord might, like Experian. Also, consider contacting former managers in apartment communities where you have a strong rental history, asking them to share with you the official history they have on file for your tenancy.  Keep in mind you will need to know the addresses where you have lived to best verify your rental history information.

Know that if you have missed rent payments, paid late, or abandoned a lease early, you will not be seen as a great renting candidate by apartment community managers. You can address the situation, however, and make a case for your tenancy.

What about first-time renters?
For first-time renters, you will have different hoops to maneuver to help convince a landlord to rent to you. Keep in mind that credit history is still considered a major part of the mix when considering lease authorization.

Money – and how you spend it — still talks!
If you are a renter, good renting behavior is not only your financial and legal responsibility, then; it may also keep your renting options alive in the future. When the time comes to renew your apartment lease or find a new apartment home, you won’t regret the positive history you have built as a reliable resident and renter.

Photo credit: Shutterstock / Andresr