This is a guest post provided by our partner ApplyConnect, -experts in tenant screenings and background checks.

Humans love finding ways to judge other people, in good ways and in bad. Is someone a ‘Type A’ person when it comes to organization? Did they go to an Ivy League school? Are they organized, or go with the flow? Did they score a minimum of 600 on their math SAT? On average, how often do they pay rent on time? If they are type A, does it reflect on their credit scores? And what is their credit score?

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A credit score is just another classic way that landlords and property managers judge their applicants. In order to decide who to rent to, they see what each person(s)’ credit score is to muddle through and figure out who might be the least amount of risk. Who is most likely to pay rent on time? Who is the most responsible when it comes to their finances? Who takes care of their credit score? Who actively keeps all their books balanced and gets to their bills in a timely manner? Once you know that information, you have a good idea who the best renter may be.

Therein lies one of the many problems. Few people want their credit score to be pulled. If someone doesn’t have the best credit score, they know that it could put them out of the running to have a new, good home. If they have a good credit score, they know having it pulled could damage this number they’ve strived for. It’s a real pickle!

Why Does Seeing Credit Scores Damage Them

This is something many people grumble about. Why should an inquiry hurt or damage a credit score in the first place? When a lender looks into a credit history (known as an inquiry), they are trying to decide whether or not that person has been responsible for paying their obligations, or to give that person money, a car, etc. When lenders inquire about someone’s credit history, it can raise many questions which is why these actions can damage a credit score.
Let’s start with the basics.

Soft Inquiries

A soft inquiry causes no damage to a credit score. Because of this, people naturally prefer a soft inquiry. A ‘soft pull’ or inquiry happens when you as a person check your own score or directly give someone permission to check it online, such as an employer or loan officer. These do not show up on any records and therefore they don’t have any lingering effect on a score. By utilizing a soft pull or inquiry, people can check scores without damaging it, allowing them to make sure everything is in order and nothing is missing.

Hard Inquiries

According to Experian, a hard pull “occurs when you apply for a new line of credit, such as a credit card or loan. It means that a creditor has requested to look at your credit file to determine how much risk you pose as a borrower.” These do have an effect on one’s credit score.

The reason a hard inquiry negatively impacts credit scores is that the assumption is consumers will be tacking on more debt. Higher quantities of debt without a long history demonstrating on-time payments can be concerning to lenders who are trying to make a decision about whether they will be paid back on the loan they’re providing. Credit scores are generally a summary of all reported payment activities over an extended period of time, and a surge of attempts to add new lines of credit adds a lot of uncertainty until there is payment history to
show the debt was not overwhelming.

Using This to Your Advantage

As a landlord or property manager, you can use this information to your advantage. One way or another, you want to know your applicants’ credit scores. In this wide world of marketing, you can increase your pool of applicants with something enticing. By relying on a tenant screening solution that uses a soft pull for their credit check, you can help applicants keep their credit score in check. Offer them the chance to apply without the hit to their score.

By doing this, you can look like their advocate. You can approach them in a manner that displays you as a considerate, pleasant landlord. By doing this, you can improve your reputation 8eover time and start on the right foot with your future tenant.

PayRent is on a mission to build a rent collection app that fosters a positive and productive relationship between renters and landlords. We focus less on transactions and more on the people behind them.