Tenants - Know what is in your credit report before you look for a rental. Every property management company and most landlords will check credit when they screen tenants. Make sure you know what is in the report so you can save time and money when looking for a rental.
Here is the transcript of my interview with George Trombley, Las Vegas Property Manager.
David Borden: Hey, everybody. I'm Dave Borden with RentScreener. Welcome to the first video on Get Ready to Rent: Behind the Scenes With a Real Property Manager. This video is going to focus on how you can get ready with your credit score, so that when you go to apply for a property, you're ready to go. Now, before you do anything, before you ever look at a property, before you ever apply for a property, we want you to go to a website called annualcreditreport.com. You can get an Equifax, Experian, and Transunion report on your credit, know what the scores are, and know what's in there. Here's why, if there's some negative information in your credit report that maybe doesn't belong there, it gives you an opportunity to take it off your credit before you apply for a property.
Also, if you know what that score is, you can ask the property manager and tell them, "Hey, my score is 'X'," and you can ask them where you're going to fall within their tenant screening policy, and if you're going to qualify for the property before you even rent it. Again, we have George Trombley, he's a property manager here in Las Vegas, and he is the owner of Blackbird Realty and Management. You've been doing property management for how long?
George Trombley: Since I was 16.
David Borden: Okay.
George Trombley: A long time.
David Borden: George, what do you look for on a credit report?
George Trombley: Well, a lot of people think the credit report is all about the score. The score is just one of the factors that we consider.
David Borden: Okay.
George Trombley: If you've got a score from 500 to 800, that's not going to be a factor that hurts you. We've approved people who's score has been lower than 500 because the other part of their credit was stellar. On a job, we'd like to have some pay stubs that show that they make enough money to pay for the property. They can't have a criminal background. If there's a felon, it's an automatic don't even bother to apply.
David Borden: Okay. Obviously, the higher the score, the better. Correct?
George Trombley: The higher the score, the better, but it's a weighted system with us.
David Borden: Okay. What would you consider a good score, just credit score?
George Trombley: Above 625 is probably a good credit score.
David Borden: Okay. Is that going to qualify someone for the highest threshold in your screening policy? If no other factors are considered but credit ...
George Trombley: Absolutely.
David Borden: Okay.
George Trombley: Absolutely.
David Borden: Okay. Can you tell us if there are some specific items that you might find in a credit report that might be more troublesome than others?
George Trombley: Yeah. We are very, very sensitive to judgments, judgments and past evictions.
David Borden: What's a judgment?
George Trombley: A judgment is when someone has taken you to court over money that's owed ...
David Borden: They've won.
George Trombley: ... and they've won, and now it's sitting on your credit waiting for them to figure out where you live, where you work, so that they can collect the judgement.
David Borden: Are there any entities whose judgments might be a little more concerning than others?
George Trombley: When you're not paying ...
David Borden: The IRS?
George Trombley: When you're not paying he government, those guys are going to come and get their money.
David Borden: Okay. How does that affect you, and why does that go into your decision?
George Trombley: Well, that affects us because the IRS will notify us that they're garnishing the account.
David Borden: Right, and those people are ahead of you in line when in comes to payments.
George Trombley: Right. They're first. They're first in line.
David Borden: That affects the tenant's ability to pay their rent if the IRS is levying their bank account.
George Trombley: Right, and if there's money owed to be returned on a security deposit, and we receive an IRS levy, we have to give that money to the IRS. There's not a I don't want to do it. I'm an automatic bill collector for them.
David Borden: Okay. Are there any other items, like utilities or medical payments ...
George Trombley: Unpaid utilities are going to be a problem, because in our properties the tenants are responsible for the gas, the water, the power, and if you can't get that turned on you really don't have a home that's habitable. You really can't live there. Those pop up. An unpaid utility bill is a big deal.
David Borden: Okay. All right. The idea here is that you need to be informed before you talk to someone like George. Now, how do you feel if someone has negative information on their credit report, or they know they have a very low score, how would you like them to handle that? Would you like them to just be honest with you up front?
George Trombley: Yeah. It's better to know up front, because you can give them advice before they apply. Once they apply, we've got to apply all of the criteria that we use for everybody to stay consistent with the fair housing. They'll say, "My credit is not so good," and we'll usually ask them, "What's the worst thing on your credit that you think is bad?" A lot of them say, "I've got some medical bills because I was sick." Medical bills aren't something that's really important to me. A lot of people don't have insurance, and they don't know when their kid is going to break an arm, and they need to go to the emergency room. That's not a big factor like ... There's no reason not to pay your power bill. There's no reason not to pay your water bill, but a medical bill that you weren't expecting, that's not a big factor.
David Borden: The point is, bad news doesn't get better with time.
George Trombley: Right.
David Borden: If there's something negative in your credit report, I can promise you that George is going to find it ...
George Trombley: Right.
David Borden: ... because those bureaus are very good at reporting it. Be honest with that person, with who ever it is, before you even apply. Every single company is going to charge you between $20 and $150 per application, per property that you apply for. If you are very honest with someone like George and say, "I have a 600 credit score according to annualcreditreport.com, and I have a couple of items. Am I going to be able to rent from you or not?" His answer might be no, but at least he saved you $50 per person on an application fee. He may tell you that, "Yes, I'll be able to rent to you, but your security deposit is going to be significantly higher." At least you know that before you go give him all your information, make him waste his time and effort, and take $50 out of your pocket for him to tell you that you've been disqualified.
Again, let's recap. You got to know where you stand beforehand. You can check your credit score at annualcreditreport.com. You can ask someone like George, or another property management company, or an apartment complex, what is your tenant screening policy? See where you fall within that policy, and if you'll be able to be qualified. Again, George Trombley with Blackbird Realty, I'm Dave Borden with RentScreener. You can reach me at dave@kohva.com. K-O-H-V-A.com. George, where can they reach you?
George Trombley: Broker@blackbirdrealty.com.
David Borden: Thanks a lot, and have a great day.
