One of the major difficulties in investigating the rental screening industry is gaining information about rental scoring. In my research for this article, I found that most of the rental agents and representatives I interviewed couldn't explain how the process of rental scoring actually worked. The following is a general overview based on what information I was able to obtain.
Like credit ratings, rental scores are numbers generated from analyzing a client's statistical data and returning a particular result. Like the FICO credit score, the mathematical formula that drives rental scoring is closely guarded and not readily explained. And like credit scores, a consumer is frequently unable to deduce exactly what constitutes a "good" score from a "bad" score.
The rental scoring formulae are even more closely guarded than credit scoring systems, due to different properties having different criteria for rental approval, differing software programs, etc. According to one residential manager, releasing the details of a scoring formula to the public would be "like Pepsi-Cola sharing its formula with Coke."
Rental scores can vary from the low 50's to as high as 300, depending on the property criteria. Generally, scores under 100 are deemed too "high-risk" for a rental application. Scores between 100 and 200 can be approved "with conditions", such as a higher security deposit, a co-signer on the lease, or different leasing terms. Scores of 200 or higher are considered the most favorable.
The scores are then matched against the rental property's application standards, which include factors ranging from income and length of employment to previous rental history and credit ratings.
An application for the Bella del Mar apartments located in Del Mar, California states that "Such information may include your bill-paying history, the number and type of accounts you have, collection actions, outstanding debt, income, and the number of inquiries in your consumer report. The final number, or rental score, represents an estimated level of risk as compared to the performance of other consumers in a range of scores."
The most prominent rental scoring software application is SCOREX, owned by the Experian Group, also known as the Experian credit reporting agency (CRA). Experian purchased the Scorex Company and its software between 1996 and 2003, and integrated it into its own credit reporting empire.
Not surprisingly, the credit report most often returned when SCOREX reviews applications is Experian's. First American Registry uses a modified version of SCOREX, called Registry SCOREX, as its statistical solution for rental scoring.
I contacted representatives of Experian to gain more information about SCOREX and its capabilities. I was shifted between several divisions in the American offices, none of whom could effectively answer anything about SCOREX or how it worked. Most of them were shocked that anyone was even making inquiries about the software; one representative I spoke to remarked that she "didn't usually talk to consumers".
In the end, it was made clear that consumers were prohibited from requesting information about SCOREX unless it was for a business concern.
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