Many firms within the apartment business view resident screening as a commodity—mere data that’s roughly equivalent regardless of who delivers it. To be sure, since the first automated screening systems came online over a decade ago, apartment operators have enjoyed greater and greater access to vast databases of financial information, credit files and criminal records. This wealth of accessible information and the challenge of differentiating across data sets have lead to a perception that all providers are the same, so why not shop for the lowest price?
Before apartment operators relied on automated screening scores, qualifying a new resident required a leasing agent to scrutinize the supplied application materials, decipher raw credit report data and call a prospective renter’s references. Today, some management companies rely solely on a single instantaneous score to qualify renters, an automatic yes or no.
Pioneering resident screening technology for the multifamily housing industry over a decade ago, On-Site realized that this “yes or no” recommendation shouldn’t be based on a statistical risk score based purely on a hypothetical pool of consumers. On-Site developed a unique scoring model which provides an overall score for all co-applicants, occupants and guarantors on a scale of zero to 10 and a combined recommendation (thumbs up or down) based on the company’s pre-identified criteria.
Since then, we’ve seen a new trend emerge—the need to deliver screening as both a product and a service. This trend is a throwback to the hands-on approach that apartment managers applied before they had easy access to automatic screening tools. The reason is easy to understand: good renters deserve red-carpet treatment, and risky ones require expert scrutiny.
For that reason, consider asking the following questions of your screening provider:
- What additional layers of in-depth investigation do you provide, such as performing reference verifications of a renter’s housing, employment and banking history?
- How do you scrutinize the credentials and paperwork submitted by renters in order to identify fraud?
- Do you have a proactive Renter Relations department to explain to a renter the details of their background check and to immediately address any disputed information?
- Does your service offer renters a convenient method to find, apply, reserve and pay for an apartment online 24 hours a day?
Apartment managers are wise to look beyond just a simple score: Studies show that over 70 percent of credit reports include serious errors. Turning away a renter due to mistakes in his record isn’t just bad customer service—it’s poor risk management.
In bucking the industry standard of delivering data “as is,” service-driven screening providers recognize the limitations of credit, eviction and criminal records—and work with apartment managers to provide the most complete and accurate picture of a renter’s profile as possible. This approach differs from relying on a statistical risk score based purely on a hypothetical pool of consumers, and not the individual. The result is more saved leases without increased risk.