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Why It's So Hard for Renters to Get Approved in Denver

Why It's So Hard for Renters to Get Approved in Denver
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The credit score required for renters to get approved in Denver remains among the highest in the country, partly because of the still-red-hot housing market in the Mile High City.

So says Nadia Balint, author of a new study for RENTCafe.

The analysis found that the average credit score of approved renters in fifty major cities across the country stands at 650, a number that's risen by 12 points in the last three years. In Colorado Springs, the median credit score is mighty close to the aforementioned national number: 651. But in Denver, the average figure stands at 676, landing the community just inside the top fifteen for U.S. cities with the highest average rent credit score needed for approval. And the average credit score of rejected Denver rent applicants — 553 — is on the high side, too.

To learn more about why, we reached out to Balint, who shares additional details in the following Q&A, conducted via email. As you'll see, she doesn't see looser credit for Denver renters in the near future.

Westword: How do the credit scores required to get rent approval in Denver and Colorado Springs compare to those in major cities across the country?

Nadia Balint: The average credit score of rental applicants who were approved for a lease in Denver in 2017 is 676, and in Colorado Springs 651, both above the national average of 650. The credit scores of Denver renters are comparable to those in Raleigh, North Carolina, Charlotte, North Carolina, San Diego, California and Washington, DC, all very active, competitive markets for renters. Colorado Springs renters have similar credit scores as those in Fort Worth, Texas and New York, New York.

A RENTCafé graphic showing the likelihood of approval for renters with a range of credit scores.
A RENTCafé graphic showing the likelihood of approval for renters with a range of credit scores.

Are Denver and Colorado Springs among the easier cities for renters to get approved using the credit-score metric, or two of the more challenging ones?

Out of fifty cities studied, Denver is the 14th most competitive market for renters in the U.S. in terms of credit requirements, with the credit score of those approved for a rental (676) well above the national average. The credit requirements for renters in Colorado Springs (651) are in line with the national average (650).

What are the factors in Denver that have led to renter approval only with higher-than-average credit scores?

Other factors that determine whether a rental application is approved include the applicant’s overall credit history (payment history, accounts in collections or default, civil judgments, past rental history, employment), as well as the availability of apartments at the city level, neighborhood level or a specific property.

Do the credit scores that are accepted in Denver reflect rising rent prices over the past five years, and if so, how?

Competitive rental markets can be more demanding in terms of credit requirements. Metros with strong economies have better jobs, more qualified applicants and choosier landlords. Denver and Colorado Springs have become more and more competitive and in-demand; rents were up by more than 50 percent in five years in Denver and over 41 percent in Colorado Springs.

Do you expect landlords to accept lower credit scores if inventory increases and demand for rental units finally begins to go down?

If inventory increases and demand goes down, landlords may lower the standards in some cases in order to fill up more vacant units. But as long as demand remains strong and an increasing number of high-earning people with good credit are renting, credit standards will stay high.

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