A hard credit pull hits your rating by 3-5 points from what I hear. I do the same for all my tenants.
Like Dave Ramsey says he has enough cash to buy the apartment complex but he can't rent a unit. He has no credit score.
I likely would not rent to him either, based on his paper trail. He is an incredibly unknown quantity, other than his name, and in a fair housing situation, you need to treat everyone the same. Have a score or not, but be prepared to pay for it.
When an applicant of mine has a low score, almost invariably they have a more 'robust' criminal record. It is 100% controlled by the person and is color blind and not based on income or other protected factors. Even when a report is wrong, it is mostly inconsequential. Most credit errors have no effect, some have a little effect, and that translates to about 50% helping the credit score.
When you understand credit score and it's relationship to personal behaviors, you will understand why it is so important. You can make the same comparison to a lot of things. Like not having a high-school diploma weeds you out of many professional occupations.
Low credit score people have more insurance claims too. I do not need a claim on my properties.
When a person does not have a credit score, that are typically of two varieties. They are new to the credit world, or they dropped out of it. When people drop out of the credit world, they likely could not be responsible to use it.
A few states prohibit insurers from using consumer credit information – California, Massachusetts and Hawaii for auto insurance and Maryland and Hawaii for homeowners insurance.
What are insurance rates, compared to other states, in those states?
So true.
