How to read a Credit Report
Credit Checks are one of the most effective Tenant Screening tools because they show an applicant’s financial health and payment history.
Running a Credit Check is a great way for Landlords to screen potential Tenants. Credit Reports provide valuable insights on a Tenants’ previous payment habits and their financial health.
FrontLobby’s Credit Reports are affordable, instant, and easy to read, designed specifically to help Landlords make informed decisions. Reports typically cover the last six (6) years in Canada and seven (7) years in the U.S.
Sections of a Credit Report
Application Information Submitted:
This section contains the personal details input by the Landlord during the Credit Check process. These should match exactly what is on the Tenant application and submitted ID.
Credit Score:
The Equifax Credit Score is a three-digit number that ranges from 300-900. Higher numbers are better as they indicate lower risk of delinquency. The score is calculated by Equifax based on a number of factors including length of credit history, payment history, utilization, current amounts owed, type of credit and new credit applications.
Along with a score, Equifax provides a rating for the credit score to indicate how individuals compare to the general population. The highest rating is Excellent indicates the lowest likelihood of delinquency and can be achieved with a score of 760+ and a long and positive payment history.
Addresses:
These are the recent addresses that exist on the individual’s credit file. Addresses can be used to verify residency at an address on the Tenant application. For various reasons, all former addresses may not show up in this section, only those that Equifax has on file.
Employment:
This list contains their current employer and up to two former employers. This list may not be complete depending on the availability of information to the Credit Bureau’s and may include dates of employment, position, employer or firm.
Employment uses the following line numbers:
Line 01 - Current employer
Line 02 - Most recent former employer
Line 03 - Previous former employer
Tradelines:
Tradelines are a record of an individual’s credit history. They contain information on the creditor, account type, status and financial details. To understand the codes and abbreviations used please refer to the information provided below.
Credit Grantor – Name of the reporting company and the consumer's customer number
Portfolio Type – Indicates the nature of the tradeline (see Types of Tradeline section below)
Date Opened – The date credit was extended by the reporting company to the consumer
Last Reported – Date the tradeline was last updated
High Credit – Credit limit or maximum amount of credit available to the consumer
Balance Amount – Balance owed as of reported date
Past Due Amount – Past due amount as of reported date
Late Payments 30/60/90+ - Indicates the number of times the account has had debts outstanding and the duration the debt was outstanding (i.e. 2/1/1 indicate the account has been 30 days behind on two occasions, 60 days behind on one occasion and 90+ days delinquent on one occasion)
Type of Tradeline:
R – Revolving: revolving amounts owed (i.e. regular credit cards)
I – Installment: Credit that is being paid off in predetermined lump installments
O – Open: Usually utility or regular payments (phone, internet, utilities, rental payments)
M – Mortgage: Monthly home payments
Rating of Tradeline / Payment Status:
0 – Too new to rate, account is approved but unused
1 – Account has been paid as agreed and is up to date
2 – Account has one past due payment
3 – Account has two past due payments
4 – Account has three or more past due payments
5 – Account has at least 120 days past due
6 – Account is in collection
7 – Account was paid through arrangement like consolidation
8 – Repossession
9 – Account was never paid and charged as bad debt
*** Rental payments reported to Credit Bureaus through FrontLobby are recorded as an Open (O) tradeline.
Collections and Bankruptcies:
Landlords should pay particular attention to this section. This section indicates liens, bankruptcies, judgements and actions being handled by a collection agency. This information may be collected from cities, states/provinces, courthouses or other third-party vendors.
Credit Inquiries to the File:
This section indicates the date and who has accessed the individual's credit report. When applying for credit cards, auto loans, cell phones, mortgages, etc. a company will make an inquiry on a credit report, which will show up in this section.