As a landlord, it should be one of your primary responsibilities to search for the best tenants. You may even leverage a credit checking service to check their creditworthiness. However, doing so isn’t always as easy, like when dealing with an international student or a foreign tenant.
Immigrant Tenants Are Imminent
You might not have come across a foreign tenant yet, but did you know that immigrants account for approximately 14% of the US population? What’s more, by 2026, immigrants are expected to account for 74% of the population growth.
Each year, about 2-million immigrants enter the US, and at least 75% of these people search for rental units to live in. Also, landlords can’t ignore the fact that 45% of these foreign nationals arrive in the US seeking a college education and then permanently move to the US for jobs. A majority of these people have high salaries and present great overseas credit histories.
Speaking of which…
Foreign Renters Doesn’t Necessarily Mean Bad Credit
A majority of highly educated immigrants typically have a decent income and have super-prime or prime credit scores. However, since they don’t carry forward a credit score from their home country, they commonly have brief credit profiles within the US. As a result, most of them are locked out of the rental market.
On the flip side, landlords also find it very challenging to rent to immigrants even if they are ideal renters. They are forced to undergo a manual and tedious process to put together their tenants’ disparate documents to better understand their creditworthiness. They do so with the help of bank statements, income statements, utility bills, and alternative data, which may even be in a foreign currency or language.
An Agency That Provides International Credit Reports
If you want to find a way to simplify this process, we recommend Nova Credit. This agency can be described as a credit bureau for immigrants that provides international credit reports to landlords who are keen on providing a rental unit to landlords.
Nova Credit does this by pulling data from a number of international credit bureaus such as Circulo de Credito, CRIF, Equifax, TransUnion, and Experian. Their services are completely free of cost from landlords and property managers and help simplify real-time screening of foreign renters.
Each applicant’s data is processed and summarized into a format that is similar to the US creditreport. Each analysis complies with and is standardized for US laws and regulations.
How Does An International Credit Report Help?
An international credit report includes:
● Credit score equivalent to US standards
● Risk attributes
● Repayment and tradeline history
● Aggregate statistics
● Derogatory market
● Other data such as employment history, inquiries, and bureau notices
By accessing this information, landlords will find it easier to identify the best foreign-born renters. This helps to:
By shortlisting the best applicants, landlords can maximize their monthly income and, in turn, their net operating income.
By decreasing the overall time and resources spent in manually screening foreign-born tenants, landlords can reduce their costs.
Landlords will also be able to distinguish between the best and risky tenants to make sure they have long-term leases in their portfolio. In turn, this would mean a lot less bad debt in their accounts.
Having access to international credit profiles can also benefit immigrant renters. They will be able to remove unnecessary approval conditions, which typically involve paying higher deposits, involving a co-signer or guarantor, or worse, getting rejected because of a no credit history in the US.
By harnessing reliable agency data, new technologies, and international credit profiles, both international renters and property managers can save a lot of time and money. It’s a win-win for both sides of the leasing contract.