The Impact of Credit on Leasing

As a mirror image of past payment practices, credit screening is one of the few indicators property companies have to predict a prospective renter’s likelihood of paying rent reliably throughout the term of a lease. Conventional wisdom suggests that the higher the credit score, the lower the risk that rent will be paid late or not at all. Yet in today’s sophisticated multifaceted commerce environment, it may be time to re-think criteria for judging payment risk.

Experts in alternative credit reporting estimate that one out of every three Americans, or upwards of 100 million people, are underserved by today’s credit reporting systems. That means they ‘fall through the cracks’ in terms of having or building a credit file. As such, these individuals, the majority of whom are employed and have simply never taken steps to build a credit score, are hampered by what they can and cannot achieve in the financial mainstream. Without a respectable credit score, these consumers are charged higher fees to access to credit for such routine needs as an apartment lease, auto financing, insurance and other essential expenses.

NPS Rent Assurance offers solutions for these renters on two levels:

  • A New Type of Screening
    Because our program requires a renter to initiate payroll direct deposit from their employers every payday as a condition of their lease acceptance, property companies know in advance of moving a resident in that the resident has taken deliberate steps to assure that funds for rent will be prioritized directly from payroll to be delivered in-full and on time every month to the community.
  • Credit Building
    As part of our commitment to renters who enroll with NPS Rent Assurance, we report funds disbursed to PRBC/Payment Reporting Builds Credit, a leading national alternative credit bureau. In addition to rent reporting by NPS, consumers can enroll in PRBC tracking of other recurring payments like utilities, auto insurance, student loans, internet and phone bills, and rent-to-own commitments – all routine charges not included in a standard FICO credit score. Building a PRBC score can enable “thin file” consumers to develop an alternative credit score that can be used with thousands of businesses across the U.S.

Our goal is to provide communities and residents with the peace of mind month after month of knowing that rent will be received from employers, through us, to communities in-full and on time.

 Credit screening is one tool in a management arsenal to protect against payment risk. The proprietary NPS Rent Assurance Payroll Direct Deposit Platform is the other. 

  Download NPS reports on industry trends and innovations for improved payment performance from residents approved conditionally based on credit.

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