Rental Industry Raising Credit Score Standards

Credit scores of approved applicants have increased by 12 points, on average, since 2014, and in some cases even more.
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A recent study by RENTCafé took a look at credit score requirements for rental applicants and how they’ve changed in recent years. People who applied and were approved for an apartment lease in 2017 had an average credit score of 650, according to national data from tenant screening service RentGrow, while those who were rejected averaged 538. Credit scores of approved applicants have increased by 12 points, on average, since 2014, and in some cases even more.

Quality and competitiveness have a big say in how good of a credit a landlord may require a prospective tenant to show in order to sign a lease. The average score of applicants accepted in a Class A building is well above the score of those who were accepted in a Class C or D building, 683 versus 624. High-end buildings command high rates, and applicants with excellent credit are more likely to be accepted.

Market competitiveness is another factor, said RENTCafé. Landlords in Boston, one of the most expensive and highly-competitive markets in the U.S., approved applicants with an average score of 737. Similarly, getting an apartment in San Francisco means having a credit score of 724, on average. Seattle and Minneapolis are also among the most demanding rental markets in terms of tenant credit. Applicants who were approved for an apartment in each of the two cities in 2017 had an average score of 711. Tenants in Oakland, Calif. and Philadelphia also had an average score above 700.

The lowest credit of rental applicants was in Las Vegas (590), Memphis, Tenn. (592), Milwaukee (609) and Mesa, Ariz. (609).