If you think that corporations in the job market are the only stakeholders requiring good credit score from their applicants, landlord and rental agencies now are also looking at good credit history before getting into contracts with other individuals and organizations.
They too, have their own reasons for considering good credit score as a factor in deciding whether to rent out properties to other people or not. Similar to corporations looking for indications of responsible financial handling through credit card reports of their applicants, the landlords and rental agencies now have an added consideration for how well their clients can keep up with the terms and conditions of a contract.
A good credit score attested by a client’s credit history can of course be a possible proof of one’s ability to manage finances well. This is especially important for landlords and rental agencies with bad experiences relating to contracts and payments with their previous clients.
Today, it is a reality that loans can never be obtained easily anymore once you have poor or bad credit. How high your interest rate is depends on whether you have a good credit score or not. This is something that every client must know in order to maximize their opportunities for finances and properties as well.
On the other hand, landlords and rental agencies look for good credit score because they use it as a basis for their interest rates. Low interest rates translate to more clients for the landlords and rental agencies. Of course they would want to have more clients in the future but this is not possible at the risk of not being able to recoup their resources in the future. Their interest then is to strike a balance between a value for the clientele and high return of investment as well.
Landlords and rental agencies also reasonably assess if they can always maintain a low interest rate for all of their clients given the varying ways by which the clients pay off on their loans.
In light of this, the landlords and rental agencies now have different interest rate ranges for good and bad credit scorers. They can put a good credit client’s interest at 4% and a bad credit client’s at a four-fold 16%. This is to give incentive for good credit scorers while making those with bad credit aim for lower interest rates by working through their payment in a more conscientious manner.