Elderly renter without a credit score

Senior Renters With No Credit

In our previous blog, we discussed where retirees are moving and the states that might see an influx of older citizens looking for rental housing. While the benefits to renting to retirees abound, there are some special circumstances that could surround renting to a retiree.

One of the number one items on your list, in regards to tenant screening, is most likely pulling a thorough credit report. Screening applicants is critical to protect yourself from renting to someone who will be unreliable or incapable of paying their rent. Credit scores are a great indicator of how responsible someone is and if they will be faithful in paying their bills each month.

What do you do, though, when someone seemingly has no credit history? Did you know that it isn’t just the young who may show no credit history? Senior citizens can also wind up with a lack of credit data. Read on to learn why seniors may have no credit history and how you can work around this unique scenario when renting to this demographic.

Why Will Seniors Have No Credit?

When a credit report is pulled for a senior who is considered “unscorable” no credit will be available. This is not due to negligence on the person’s part, it is, in fact, something that is referred to as “Credit Retired.”

Credit retired occurs when a senior has paid off their mortgage, their credit cards, and all loans without putting anything else on credit. This person has operated free of debt for a long enough period of time that they no longer have any credit data to pull. The difficult component of this is that it means when a landlord goes to pull the credit history of a senior applicant, they may come back empty handed.

To demonstrate this, imagine the following credit history chart of senior citizen Philip.

Infographic of a senior credit loss timeline

Obviously, you can see from the timeline above that Philip is far from an irresponsible person. He is in fact at a point in life where he has no need to put anything on a credit card or to take out any more loans. He is financially stable and pays for things with cash or debit. Unfortunately, credit reports only work off data from actual use of tradelines or accounts. Without this data to pull, it can seem like Philip has no credit history.

How To Rent To Creditless Seniors

As a landlord, what should you do in a situation where someone like Philip applies to your property? Without a credit history, how can you validate that Philip is indeed responsible enough to rent your property? Often retirees are no longer employed either, making income verification a moot point as well.

While you may be missing some of the normal pieces for tenant screening, it doesn’t mean you can’t still find out important information about the applicant.

Screen For More Than Credit

When you run a screening report, you should also be pulling a criminal background check and an evictions history. While Philip might not have a credit history anymore, you can still gain knowledge from the other reports pulled in a thorough tenant screening.

Ask For A Bank Statement

Another way you can gauge whether or not renting to Philip will be feasible is to ask for a bank statement. Many retirees have sold their homes and are living off of a comfortable bank account. By verifying how much money they have in the bank, you can determine if your rental property is in their feasible price range. For most seniors, this step will be an excellent form of verification.

Talk To References

If they have already been a renter in the recent past, ask for a landlord reference. Speaking to previous landlords can give you a good idea of how responsible they were as a tenant. You can also ask to speak to previous employers. Even if they are retired now, an employer can verify if they were a responsible employee during the years they were there.

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