Your credit score plays an important role in your financial journey and can impact everything from the type of car you drive to where you can afford to live. A good score (we’re talking in the 670-739 range) can open doors and create new opportunities that allow you to have a better future. A damaged score (300-579) can lead to plenty of financial hurdles.
If you’re considering becoming a PadSplit member, you may be wondering how your credit score will factor into the mix (and if it’ll be impacted by the application process).
Here’s a quick rundown of how PadSplit handles credit and just how much a credit check is involved.
Does PadSplit check my credit score?
At PadSplit, we may take a peek at your credit when you apply for a membership. However, this will not impact you if you’re approved to book a room and become a member.
It shouldn’t impact your FICO score, either. Why? We will only conduct a “soft” credit check if we review it.
What is a soft credit check?
A “soft” credit check is also called a soft credit pull or soft credit inquiry. It’s conducted when someone checks your credit report, but you aren’t submitting a formal application for credit. It doesn’t hurt your credit because you aren’t actually requesting to borrow any money. A soft pull doesn’t even factor into the credit bureaus’ credit score calculations.
In contrast, a hard credit check is an official loan application. In that case, it will stay on your credit report for two years. It can also lower your score (although a single hard pull should have minimal impact).
You can trigger a soft credit check in a few different situations. Interviewing for a job, applying for a credit card, and getting pre-qualified for a car loan involve soft credit checks (all normal circumstances that you’ve likely already gone through).
Applying for housing with PadSplit also may involve a soft credit check, but (rest assured) we don’t need to go further with a hard pull. This is because we aren’t considering whether to approve or deny a prospective member.
Those with any credit history (and even no credit) can join the PadSplit community. There is no minimum credit score requirement to become a member. We may review credit history (soft pull), but it does not determine approval or denial. Income verification is what determines the weekly room rate limit.
Why your credit score isn’t a primary factor when applying for PadSplit
If you’re wondering why a low credit score wouldn’t impact your membership, we get it. In most rental scenarios, this is a main qualifying factor. But in a traditional situation, you’re talking about deposits and long-term rental agreements.
PadSplit’s unique mid-term rental model is built on a week-to-week payment structure.
That means a host doesn’t always need an intimate knowledge of your long-term financial situation. They simply need to know that you can afford the weekly rate right now (more on that in a minute).
This makes it possible for you to become a member (for just $19) regardless of your credit situation. You can then begin to look for PadSplit rooms in an approved range, whether you have great credit, damaged credit, or even no credit.
PadSplit’s income requirements
Like credit checks, we handle income requirements differently, too, at PadSplit. We do have an income requirement portion of our application process. However, rather than turn anyone away, we use your income to set a maximum weekly room rate.
This next step is easy. All you need to do is upload your financial documentation (bank statements, deposit records, pay stubs, etc.) or use Plaid to automatically verify any recurring income you have. We take it from there to calculate your rental rate. We even have a “pay upfront” option if you’re between jobs. We truly do our best to accommodate you at any stage or season of life.
It’s time to use your credit to build your future
At PadSplit, our goal is to use your credit to set you up for a successful future. Once you have a maximum rate set based on your income, we get to work helping you build a better credit score and a brighter financial future.
If you’re interested in renting a PadSplit space, start looking for rooms in your area and take a step toward your next chapter. Now is the time to rent smarter.
