San Francisco has some of the highest rents in the entire country. Rent isn’t the only thing that’s high in the city, though. Landlords here also require higher credit scores than those in other cities do, according to a study from RentCafe.
The nationwide average credit score for renters is 650, but the average in San Francisco is 724. That puts San Francisco second to only Boston. Beantown rules the pack with an average credit score of 737.
Why Do Landlords Care About Credit?
Rent doesn’t feel like a regular bill, so tenants are often confused as to why landlords care about their credit. That confusion reaches a fever pitch in San Francisco since so many people are unable to make the cut because of their credit scores. They feel like they’re being treated unfairly, and they want to know why credit scores are so important.
Landlords look at credit scores to get an idea of how responsible the potential tenant is. Someone with a low credit score is less likely to pay rent in full and on time than someone with a good credit score. Also, someone who has a good credit score is less likely to abandon the rental. The person won’t want to get a bad mark on his or her credit report, so the tenant is likely to meet all of the rental obligations.
Is the Credit Score the Full Picture?
Some landlords look at credit scores and move on. Savvy landlords investigate the stories behind scores. They pull tenant credit reports to get the full picture. They see if the score is bad because of recent behavior or if it’s bad because of something that happened well in the past. They also look for such items as medical debt. This is something that is outside of the tenant’s control, so some landlords will give the potential renter a pass.
Credit Score – Not the Only Factor
Credit scores are important when renting in San Francisco, but that’s just one of the factors landlords analyze when approving or denying renters. Landlords also consider employment stability and income. Landlords need to know tenants have stable jobs and have enough money coming in every month to pay their bills, including the rent. The debt-to-income ratio is also important. Someone can have a high-paying job, but if he or she has lots of bills, making rent might still be a problem.
The Bottom Line
Credit scores are important for landlords and tenants. Tenants should try to get their scores up before renting, and landlords should pull credit reports to get a good idea of what the tenant is like. That is only part of the picture, though. Landlords should also run tenant background checks to screen potential tenants. Then, the landlord will know if the potential tenant is a good fit for the property. If the person is, the landlord can move forward with the lease so the tenant can move into the property.