information effectively and legally in their real estate business. Think Realty Magazine sat down with Tyler Sawyer, vice president of rental, real estate & property data and analytics at Equifax, to explore recent changes in credit scoring and credit-data manage- ment technology. THINK REALTY MAGAZINE Okay, pull back the curtain! How does credit scoring really work right now, in 2018? TYLER SAWYER Specifically in a tenant-screening situation, [a credit bureau] is tasked with providing credit reports, often at the request of a third-party such as a tenant-screening service, whichmanages the full application process from front to end. This includes everything fromobtaining veri- fication of income, verification of employ-
ment, to any other key areas that the rental owner requires that fall within the legal range of privacy laws and local regulations. Additionally, this will also likely include some form of background check as part of the process as well. The service then aggregates all this information and, either on its own or in conjunction with the landlord, uses it to make a well-informed decision that serves the best interest of the business and commu- nity, along with any other goals they have for their prospective tenants. Typically, that process looks more or less like this: 1 Get the credit score 2 Determine if the applicant is em- ployed and verify their income 3 Confirm that the applicant is
earning roughly three times the value of their monthly rent
4 Identify past evictions and criminal behavior
5 Make a decision
TRM Lately, there have been some big changes to the industry that prohibit some pieces of that process. Some landlords now operate in areas where the back- ground check and even information about non-payment of certain taxes cannot be part of the screening process. What does that do to the credit side of things?
TS The thing every investor (and lender, for that matter) must realize is
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