Landlords Use FICO Score to Screen Renters
What FICO score is needed to rent a home? This table shows what goes into a FICO score and the different levels of the score.
The FICO model is used by the vast majority of banks and credit grantors, and is based on consumer credit files of the three national credit bureaus: Experian, Equifax, and TransUnion. Because a consumer’s credit file may contain different information at each of the bureaus, FICO scores can vary depending on which bureau provides the information to FICO to generate the score.
In addition to credit providers, more landlords are using an applicant’s FICO score when considering choosing a new resident. It has become very easy to do on the internet. They generally use the levels indicated in the diagram.
Why we look at an applicant’s FICO score
Broadly speaking, a person’s FICO score shows how credit worthy they are. It takes into consideration how much credit they have, for how long, and their payment history. We want to be sure the rent gets paid on time.
To do so, we use a holistic approach when we consider an applicant. In addition to the FICO score, we check whether they’ve been previously evicted (almost a guaranteed denial). We check the criminal (including Megan’s list) and public records for any negative marks. We check their rental history. And we also confirm that the social security number they gave us is actually theirs.
If the applicant still looks good, we call their employer to confirm that they make the money they indicated on their application. And then we call their landlord (and previous landlord depending on how long they have lived in their current home) to find out what kind of tenant they were.
Finally we look at all of this information to determine if the applicant is a good fit for the property they are interested in. If necessary we ask for additional security deposit and/or a co-signer.
It generally takes us two business days to fully screen an applicant.