More than 2.2 million borrowers saw their credit scores drop 100 points or more in just a few months, and one in three borrowers making payments are now more than 90 days delinquent, TransUnion found. One in five borrowers has stopped paying altogether.
“The influx of applicants struggling with student loan payments could have a significant impact on property managers,” said Maitri Johnson, executive vice president of TransUnion’s tenant and employment screening company. “Applicants who once met screening thresholds are now falling short.”
Property managers who rely on credit-based screening are now seeing increased risk among applicants. TransUnion reported that renters with excellent credit scores between 661 and 720, once considered low risk, are moving into riskier categories, with scores dropping at all levels.
The report also warns that renters’ financial stress is fueling a rise in fraud, with some applicants falsifying documents or misrepresenting their income. And as student loan delinquencies increase and credit levels decline, the report recommends property managers adjust their screening strategies.
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