Give Them Credit: How expatriates can shine as renters without a US credit history

Posted by: TheGuarantors on September 27, 2018

Approximately 40% of New York City residents were born outside of the US. 

These 3.3 million New Yorkers often experience rental difficulties with landlords unwilling to accept applicants without a US credit score. This presents a unique challenge to landlords. How do they better tap into this potential applicant pool and fight vacancy rates when their current underwriting standards cannot qualify these renters?

This is not a minor issue. In addition to its sheer size, this group contains a large number of professionals on H-1B visas and graduate students. While they have the potential to be the perfect renter, these renters may not make the cut within the current leasing framework. According to U.S. Citizenship and Immigration Services, expats with H-1B visas have high employment concentration in computer and engineering-related fields. These industries have a median salary of $82,000 per year, a strong indicator of a good renter that landlords who focus on credit scores may overlook.

Graduate students are similarly compelling. The challenge is that, regardless of any liquid assets, landlords often require an official letter of employment, which many full-time students would be unable to provide. What landlords often overlook is that fact that these students may have worked previously and have sufficient liquid assets to pay rent. The standards also overlook students’ future earning potential after school.

What’s clear is that the current system is flawed. As it stands, landlords who encounter these types of renters will often require a guarantor, extra security deposit, or reject the applicant outright. That’s the main reason we founded TheGuarantors.

Since our founding, we’ve devised a number of innovative insurance-based products to help landlords in facing these renters, and enhance the leasing experience for all. Our Lease Guarantee product helps renters who require a guarantor or have been rejected navigate these renting hurdles. Landlords are more willing to accept a renter who has purchased a Lease Guarantee policy with us, given the rental payments are guaranteed by a reputable insurance provider.

For the situations in which an extra security deposit is required, we’ve got a tool for that too! With our Security Deposit Replacement, the renter is able to pay just a fraction of the augmented security deposit required. From the landlord’s perspective, they are getting the same (and even better!) coverage than they’d be getting with a cash deposit.

To date, TheGuarantors have guaranteed over $100 million in rent and we’re adding about $15 million each month. All in all, landlords have a strong, reputable Lease Guarantee and Security Deposit Replacement partner in TheGuarantors.