Rental history, credit, and income are extremely important to look at when considering which prospective tenants you are going to approve or deny, but for landlords, what does the data actually mean in terms of 'chance to default'?
Did you know that in the U.S. only one out of every five people have a credit score below 600? Also, did you know that people with a 600-700 credit score have a 6.70% of default, while people with a 500-600 credit score have a 18.24% chance of default.
Did you know that a renter with positive rental history has a default rate of 5.96%, while a renter with one prior rental debt (a skip or unpaid balance) has a 23.22% chance of default? So if someone has just one prior rental skip or unpaid balance they are almost 5 times more likely to default.
If you are a landlord, you should take a moment to look at this report provided by Experian.
(Page 7 in particular is extremely informative, showing % of default based on rental history and credit combined.)
CLICK HERE FOR: EXPERIAN REPORT - RISK VS. REWARD