when you remove components from a particular score, that score will change and be less comprehensive. In some cases, especially when an individual has very little credit history or their history is not stellar, the removal of that information can hurt. Remember, this exclusion affects everyone, including the people who did pay their property taxes, for example, because that information is now eliminated from the system. When there is not enough data associated with a credit history, the end result is that the person who requested the information, the landlord or lender, is going to be taking on more risk and will likely require a higher deposit, a co-signer, or reject the application outright. This is a problem because it makes it more challenging on both sides of the equation to get the lease papers
signed and place a tenant.
this information?
TRM Are there any other sources of information out there to help fill in those gaps? Yes. If your goal is to really fill the gap and put people in homes, you have to be really laser-focused on what happens when an individual has either thin credit or no credit. For example, you might evaluate past rental payment information, whether the individual pays their utilities and telecommunica- tions bills on time. Knowing that they prioritized their last housing bill, for example, is good to know if you are considering renting to them! TS
TS A lot of it can be found in the public record, or you can look to sources of data that might not previously have been on your radar when you did a credit check. As the credit-scoring environment and industry continue to evolve, you want to leverage new types of information for no-credit and low-credit populations to increase the size of your population of viable residents. •
Tyler Sawyer is the vice president of rental, real estate & property data and analytics at Equifax Inc., a consumer credit reporting agency that collects and aggregates data
onmore than 800 million individual consumers and 88 million businesses worldwide. Learnmore about alternate data sources and credit scoring at Equifax. com or email wyatt.jefferies@equifax.com.
TRM Where should investors look for
40 | think realty magazine :: september 2018
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