“We’ve definitely changed some of our parameters,” Conn said. “There is a
significant difference if you go by score alone, and that’s where we delve into
other factors like payment history, income and things like that. Knowing the
economy has taken a dive and people have lost homes or experienced other
unfortunate situations, we have lowered some of our qualifications to deal with
the circumstances. Most people are more open now to saying, ‘my credit’s bad
and here’s why,’ whether it’s a foreclosure or divorce or something like that.”
HIGH-TECH LEADS TO HIGH-QUALITY APPLICANTS
Technology tools like On-site.com and the LeasingDesk as well as Credit
Optimizer applications from RealPage and Experian’s RentBureau can make it
easier to efficiently dig into applicants’ data. Technology also makes it easier to
adapt to rapidly shifting market dynamics and make operational adjustments.
Houston-based Camden Property Trust, AMO, has used RealPage and its
applications for about a decade to help gauge supply and demand in shifting
markets and submarkets. That data has enabled the multifamily real estate
investment trust to adjust standards for applicants and make quick decisions, especially in markets like Las Vegas and Colorado, where Camden now
requires income verification from applicants.
“[Technology] has helped us to where we didn’t have to change credit standards
because our pricing adjusted,” said Melinda Graham, CPM, regional vice president for Arizona and California at Camden Property Trust. “The market went
so low that people who wouldn’t normally qualify for the property did qualify.
Now, rents are recovering and we’re seeing some of those people moving out.”
Camden has also rolled out a foreclosure-forgiveness program enabling
applicants to get an apartment if other factors match its standards.
Accurate tech-derived, rental-history data also opens up properties to more
qualified prospects while adding another layer to weed out potential scofflaws.
Those historical data can shed light on an applicant from an under-banked
demographic who may have a great track record of paying rent but may not
have a clear or lengthy credit history.
“It’s a great way of safely expanding one’s reach to an emerging market,” said
Brannan Johnston, vice president and managing director for Experian’s Rent-
Bureau. “With respect to rental data, our clients feel like an individual’s rental
payment history is one of the most accurate predictors. Increasingly, residents
also will seek out properties that contribute data, and credit them for paying
Of course, screening companies
play their role, too, especially in
helping managers explain declines to
owners. Good screening companies’
data and trend analysis helps owners
and managers see different shades
of gray and discern who’s worth a
chance and who’s too much of a risk,
said Mitch Harrison, partner with
Atlanta-based First Communities,
which manages 80 communities with
approximately 20,000 units across
“You don’t want to price yourself
out of the market from a credit and
screening perspective,” Harrison said.
“There aren’t many people out there
with perfect credit.”
Harrison pointed out that, across
the board, credit scores have declined,
and it’s not infrequent to have appli-
cants whose credit has been ding-
ed by medical bills or student loan
debt. With these factors and others,
First Communities is placing added
emphasis on verifying work history,
especially tenure at a job, and appli-
cants’ track record with rent payment
and previous landlords.
“Certainly from a macro-stand-point, we wouldn’t be doing our jobs
if we weren’t digging a little deeper,”
Harrison said. “You have to look at
each applicant to get a true picture
of where they stand. It’s a big jigsaw
puzzle, and you have to put it all
We’re in a reality check here. These are good people who got
in over their heads and can still pay rent. We’re really trying
to work with people.
”-Brenda Lindner, CPM, RAM, Atlanta
Bailey Webb is a contributing writer for JPM®. If you have questions regarding this article or you are an IREM Member interested in
writing for JPM®, please e-mail Mariana Toscas Nowak at email@example.com.