Rental History Scoring

Rental History Scoring:

Why do we use it?

There are significant behavioural outcomes when people are faced with the choice of paying for shelter and nearly every other expense. A rental history scoring system helps to balance these realities in a fair and equitable manner. A good payment history dramatically outweighs one of delinquency; but beyond that, when a good history is applied to tenancy it demonstrates that everyday consumables are often forfeited for shelter. Balanced information, gathered over a reasonable length of time, is absolutely necessary to calculate a tenancy record that we measure as RentScore®. Because there are significant differences in the variables and criteria of consumer-based credit reporting, versus renter-based tenancy reporting, the two should not be used interchangeably, but rather as complements to one another.

1. OVERVIEW

RentScore® is a numerical value ranging from 300 to 900 that measures the quality of rentlife (QR) a housing provider has experienced in relation to any individual tenant or tenant family. It is created using a mathematical formula that weighs data from a tenant’s rental history file; this is pure rental information that excludes credit history. The RentScore evaluates a tenant’s rent payment patterns, debt levels and rentlife history. Subjective factors such as income (unless volunteered), race, or gender are not measured in the scoring process. While rent scoring has mainly been used by housing providers, today a growing number of mortgage companies, credit agencies, insurers, employers, utility companies and even government departments are using it. A high RentScore is a significant asset to tenants applying to rent desirable accommodation; they will be more favorably considered over those with poor rental histories.

2. RENTSCORE® AND RENT PAYMENT HISTORY

Approximately 30% of the RentScore® is based on this category

​What is your tenancy history track record?

The first thing any housing provider looks for is whether the applicant has paid past and current rent accounts on time. This is one of the most important factors in calculating a Rent Score. However, late payments are not an automatic score-killer. An overall good rent profile can outweigh one or two late payment occurrences. By the same token, having a history of no late payments doesn’t mean you get a “perfect” score.

Statistics show that 98% of renters show no late payments at all, which is why rent payment history is just one kind of information used in calculating your rental history score.

Here’s what RentScore® takes into account:

• 1. Track record of payment information: Sources for this record include: utilities (hydro, gas, oil, water, phone, cable etc.), rental accounts from social housing providers (non-profit, co-operative housing etc.), tenancy accounts with real estate professionals (where slow sale of a house results in a rental, or the property is managed by a real estate broker), finance company accounts and mortgage loans (where the applicant is a renter), and private businesses.
• 2. Public record items: These include evictions, bankruptcies, foreclosures, lawsuits, wage attachments (garnishees), collections, liens, or judgments. They are all considered serious, although older items and items involving small amounts of money will count less severely against your RentScore® than more recent items, or those involving greater sums of money.
• 3. Details on negative items: These include specifics such as; lateness of overdue payments, how much was owed, how recently delinquencies occurred, or how many there are.  A rent payment 6 days in arrears may not be as serious as one that is a month late, but the number of late payments and how recently they’ve occurred counts as well. For example, if you paid an account that was 60 days in arrears last month, that will impact your RentScore® more negatively than a payment made 90 days late three years ago. NB: Terminating a tenancy on which you previously missed one or more payments, satisfying a judgment, or rectifying collection items does not delete them from your rent report. Removing such items depends on jurisdictional purging rules; these include the 6-7 year limit on Judgments and Orders for collections and rent arrears; 3 years from paying off a debt; or 7 years for a bankruptcy discharge.
• 4. Accounts with no late payments: A good track record on all your tenancy accounts will always increase your Rent Score®.

3. LENGTH OF TENANCY HISTORY

Approximately 10% of the RentScore® is based on this category.  

How established is yours?

 In general, the longer a tenancy you have with each housing provider, the more positive impact it will have; lengthier, problem-free rentals earn higher scores. But tenants with short-term or mixed-duration tenancies can also receive high scores, depending on how the rest of their personal report looks.

4. A NEW TENANCY

Approximately 10% of the RentScore® is based on this category.  

​Are you moving frequently?

Today’s renters tend to move more frequently than ever, thanks to universal Internet access that makes comparison shopping for the best accommodation deals easy. RentScore® calculations reflect this reality.

However, research shows that opening and closing several rental accounts within a short period can also indicate instability – especially for those without an established tenancy history. RentScore® factors in the number of “inquiries” potential new landlords make to reporting agencies as a result of an individual’s rental applications. (An inquiry is a landlord-initiated request to obtain a copy of an applicant’s rental history report.)

​RentScore® distinguishes between rejections and approvals when an individual makes multiple accommodation applications; these are not generally associated with higher risk.​

5. STATUS OF CURRENT AND PAST RENTALS

Approximately 10% of the RentScore® is based on this category. 

​Do you have a “healthy” overall rent life history?

RentScore® considers an individual’s mix of tenancy accounts, including private housing, co-operative housing, non-profit housing and overall status. The housing mix usually won’t be a key factor in determining your score unless your rent report lacks other reference information; in that case a lower score may result. It is definitely inadvisable to leave too many tenancies in poor standing when you move out.

COMMON REASONS FOR A LOW RENTSCORE® 

• Eviction, illegal acts, serious delinquency

• Serious delinquency, or collection filed

• Derogatory public record or collection filed

• Time since delinquency is too recent, or unknown

• Value-level of delinquency on accounts

• Number of accounts with delinquency

• Amount owed on accounts and for how long

• Length of time rental accounts have been established

• Too many accounts with low-to-high outstanding balances

• Too many accounts with derogatory reports and/or references