Credit reporting agency Equifax announced Monday it will allow landlords to check prospective tenants' credit without it affecting their credit score.
The company created soft credit check designed for the multifamily industry, saying this will help those who might already have a thin credit file.
Soft credit inquiries do not impact a consumer's credit score like hard inquiries. Instead, they are credit checks that are typically only visible to the consumer, and are not used to calculate credit scores.
“In high-density markets, renters often apply to multiple properties before securing a lease,” said Tyler Sawyer, Equifax vice president of rental and real estate. “Offering soft pull credit inquiries will help renters find the best lease and terms without worrying about negative impacts to their credit score. This becomes especially invaluable to Millennials who may already have thin credit files.”
While they will be soft credit inquiries, Equifax’s reports will continue to provide the multifamily industry with the same consumer information property managers need to assess renters and mitigate risks.
Equifax explained this will have a significant impact on Americans as about 36% of all occupied homes in the U.S. were rented as of June 2018. This is up from 31% in 2006, data from Zillow shows.
In fact, the latest report from the Mortgage Bankers Association shows mortgage debt just hit an all-time high. And commercial and multifamily mortgage originations are expected to hit a record high this year.