CLP Credit and Financial Analysis 3

Question 1

A rental applicant has a FICO score of 580. Under a tiered-approval system, this score would most commonly result in:

Accepted Answer

Conditional approval, such as an increased security deposit

Answer

Many properties use tiered criteria where lower scores trigger conditional approval with additional financial requirements rather than automatic denial.

Question 2

When calculating income-to-rent ratio, a property requiring 3x the monthly rent means an applicant for a $1,400/month apartment must earn at least:

Accepted Answer

$4,200 per month

Answer

$1,400 × 3 = $4,200; the applicant must demonstrate monthly gross income of at least this amount.

Question 3

Which federal law requires landlords to provide adverse action notices when denying an application based on information in a credit report?

Accepted Answer

Fair Credit Reporting Act (FCRA)

Answer

The FCRA mandates that any adverse action based on a consumer report triggers a written notice informing the applicant of the source and their right to dispute.

Question 4

A collection account labeled 'medical' on a credit report is significant to a leasing professional primarily because:

Accepted Answer

Newer FICO models may exclude or reduce the weight of medical collections

Answer

Recent FICO and VantageScore updates have reduced or eliminated the scoring impact of medical collections, making context important when reviewing reports.

Question 5

An applicant's rental history shows two NSF (non-sufficient funds) returns on rent checks within the past 12 months. This is most relevant to the credit analysis because it indicates:

Accepted Answer

The applicant likely has poor cash-flow management relative to rent obligations

Answer

NSF returns on rent checks directly signal cash-flow problems and inconsistent ability to meet recurring housing obligations.

(CLP) Certified Leasing Professional Practice Test

(CLP) Certified Leasing Professional Practice Test

CLP Credit and Financial Analysis 3