This article was posted on Monday, Nov 01, 2021

magnifying glass to check credit

Photo by Tima Miroshnichenko from Pexels


With all of the complexities that have come along with the pandemic, researching the credit of rental applicants is essential to choosing the most qualified tenant for a unit, now more than ever. Credit can’t tell you everything you need to know about an applicant, but historically, it has provided important information in the selection process. 

But the pandemic has complicated things where credit is concerned. Millions of people were unemployed for a year or longer (or still are) due to shutdowns for public safety, and they have relied on assistance programs to continue renting their residences. We think of our current time as “post-COVID,” but in truth, the pandemic isn’t over yet. As property managers, the question we should ask ourselves is what do these changes in the effectiveness of credit checks mean for our industry? Let’s explore some information that’s pertinent to answering that question.

Credit Scores Might Not Be as Effective … For Now 

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Joelle Scally, a Financial and Economic Analyst for the Federal Reserve Bank of New York, has said publicly, “[Credit scores] are a really important tool for lenders to identify creditworthy borrowers, but with the protection of the forbearance programs some of that may be muddled.” Given that typical indicators of poor credit (such as unpaid rent and other outstanding payments) don’t have the same implications right now due to the circumstances of a global pandemic, it makes sense that credit scores aren’t as cut-and-dry as they usually are. A permanent weakening of credit scores as a tool would cause a significant shift in the way property managers and property owners evaluate applicants, but fortunately that’s not in the forecast. The efficacy of traditional credit scores will return, and in the meantime, banks are in the process of developing more holistic tools. That leads me to the next key factor. 

New Models are Incoming 

Financial institutions are hard at work developing data-driven analysis models that will provide a more accurate credit risk assessment than current systems. Basically, help is on the way. Just like FICO updated their credit scoring system in January 2020 to include personal loans as a distinct category, new credit assessment systems will likely be able to account for the intricacies of how the pandemic affected a person’s financial standing. But just as you wouldn’t expect the financial sector to sit idly by while a worldwide disaster weakened one of its most essential tools, you shouldn’t sit idly by and wait for new metrics to return the tenant-analysis process to normal. 

Property Managers Will Have to 

Strengthen Other Evaluation Efforts 

This might go without saying, but there’s no way around it – in the current absence of a perfect credit-checking system that contextualizes pandemic debts, property managers will have to place greater emphasis on their other means of appraising a prospective tenant’s financial responsibility. 

  • If you used to only call the tenant’s previous landlord, you should call their previous two landlords now. 
  • If you used to only run a statewide eviction search on them, run a nationwide one now. Both of these examples should already be standard practices for all property managers, but if they’re not for you, take this opportunity to step up; it might be your only way to even things out if you can’t perfectly check credit. In addition, you can ask for verification of previous money transfers between the tenant and their landlord in order to support the tenant’s creditability. 

If anything, the inability to rely on credit checks should make you even better at selecting tenants in the future, because you should retain the other skills and practices you develop as a result. As I’ve said since the early months of this strange and confusing time, and as I say about all adversity, the best thing we can do with it (after we end it) is learn from it. 

[Editor’s Note:  Be sure to use AOA’s low-cost, 24/7 tenant screening service.  Take advantage of your AOA membership and save big!]


David Crown is the C.E.O. of Los Angeles Property Management Group, and has over twenty-five years of experience managing all types of income properties. A hands-on leader who has managed properties in 16 states, Mr. Crown has been asked to serve as an expert witness in property management matters, and currently serves on the Forbes Real Estate Council. He can be reached directly at 323-433-5254 or by visiting


To read more articles from the November 2021 Issue of the AOA Magazine, click here.