Traditional thinking says that applicants with lower credit scores should be required to pay additional cash security deposits to compensate for their presumed payment risk. However for one-in-four Americans, paying extra money at move-in can all but assure they’ll come up short on rent soon into their lease.  That means that paying an additional security deposit of even $200 to $500 can drain frail savings and force otherwise employed and responsible residents into a financial jam.

A recent report by the Federal Research Board illustrates that financial security is illusive for many Americans who have little or no savings and dread an emergency that would tap any available access to borrowing they may have And while finding a new place to live isn’t typically an emergency, for most it’s a major priority that taps into the same limited savings that would be used to cover an unexpected expense.

That’s a problem worth fixing when it comes to security deposits and rent. 

Forward looking assessment says that the lease offer calculus should include how an applicant agrees to fulfill their lease obligations, particularly if they agree in advance of lease signing to essentially remove themselves from management of the portion of payroll that should be applied toward rent.  Rent from payroll allows them to do just that while providing participating communities with the assurance that funds for rent will be segregated into a rent account before residents have a chance to use them on other life essentials. Stated differently that means that applicants who take deliberate steps tied to automated payroll deposits to make sure their rent is delivered on time deserve to be assessed differently with less of a cash requirement up front. Why? Because everyone pays their rent form payroll, but not everyone is good at budgeting. When a resident instructs their employer to prioritize pay period deposits from payroll to help them meet a financial obligation they do what most don't.  By doing so  the resident agrees that they can’t pull those dollars back, and that keeping a roof overhead makes a new personal cash management system a new personal priority.