As you’re no doubt aware, high credit scores can help you save money by lowering the interest rate you pay on credit lines and credit cards, among other things. But can high credit scores also be a factor in how much (or little) rent you pay?
The answer probably won’t come as a surprise: It depends — on a lot of other things.
A high credit score certainly won’t disqualify you from a good rental opportunity. On the contrary, a proven record of responsible credit management — and the high credit score that accompanies it — makes you more attractive to landlords than a low or middling credit score would.
Rent opportunities that can help you save money on housing are available in good numbers these days. Here are a few factors driving the rental market:
No central authority
The rental industry isn’t controlled by one or even a few central interests that can coordinate rental prices and share information on renters. The largest third-party managers of multi-family housing handle fewer than 200,000 units nationwide. Since competitors don’t share information with each other, there’s no coordinated national effort to target high credit scorers with special rental offers.
Unemployment
With the economy still struggling to create jobs for millions of under- and unemployed workers, the rental industry is in a state of flux. More and more, individuals and families are moving back home with their parents or are “doubling up,” i.e., moving into apartments or homes that are already occupied by friends or relatives. This is driving down the number of potential renters.
Low demand
This slackening demand is a factor that individual landlords and property management companies take into consideration when determining rental prices. They can’t make any money on unoccupied units, but if rents are excessively low, the monthly rent payments may not cover their mortgage costs. Some landlords and management firms are offering rent prices that are less expensive or at least flat compared to prices offered two or three years ago.
Bottom line
From a big-picture perspective, the availability of lower rental rates is caused more by the continuing weak economy than by high credit scores.
On a case-by-case basis, landlords may look more favorably on a high credit scorer than a low scorer, but the final rent price will very much depend on the local rental market and the competition among renters for the unit in question. However, a high credit score can separate you from other applicants vying for rentals, which is just one more way that a high credit score can help you get the rental price you’re looking for.
