Austin Tops Texas Cities In Terms Of Credit Score, Lease Approval

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Austin Tops Texas Cities In Terms Of Credit Score, Lease Approval
05 Dec

AUSTIN, TX — A study on credit scores as they relate to being accepted for an apartment rental shows Austin to be in good shape.

The study ranked Austin the 18th spot among the 50 cities nationwide studied, with an average score of 659. Austin boasts the highest average score out of the seven Texas cities studied, in a city that has seen a 0.2 percent uptick in rents over the past year. The average apartment rent is now $1,304 per month locally.

Among the study’s other findings:

The average credit score of those approved for an apartment lease is on the increase, up 12 points since 2014 to hit 650 in 2017, according to rental applications submitted nationwide.
Across building types, rental applicants approved for an apartment in 2017 had average scores that range from 683 in high-end buildings to only 624 in low-end buildings.
Baby Boomers are the generation with the best overall credit scores, with the highest accepted average score of 683.
Two of the most expensive hubs for renters led the way: Boston with a 737 average credit score of approved applicants and San Francisco with 724.

"While it may not all boil down to a renter’s credit score, our research shows there’s a strong correlation between it and application approval rates, as you can see in the graph below," researchers wrote, offering an illustration:

The analysis was compiled by RENTCafe using data from RentGrow, an online tenant screening system featuring comprehensive reports, reliable data and automated recommendations for property owners and managers, researchers explained. Screening data used in this study is from rental applications submitted between January 2014 and June 2017 nationwide. Credit scores are based on the VantageScore credit score model using a scale of 300-850.


"When reviewing rental applications, landlords and property managers look at your overall credit history, including whether you make payments on time, have accounts in default or collections, your rental history and other factors that go into the credit score formula," researchers wrote in the study. "The sum of these things can weigh more in the approval process than the credit score by itself."

But the credit score figures prominently in the process, according to the study’s authors.

"However, our recent story about application approval rates showed that a positive correlation between credit scores and a prospective tenant’s chances of getting approved does exist, precisely because your credit score is a reflection of your overall credit history," researchers wrote. "By our calculations, there is a very strong 0.96 correlation coefficient (where a 1.0 coefficient represents the strongest correlation) between credit scores and approval rates."

To check out the full study (including how other Texas cities fared), click here.

>>> Images courtesy of RENTCafe

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