Any of guarantor companies do not disclose screening criteria. So if you are rejected in screening, you don’t know the reason. And it sets unique criteria depending on the company so it is pretty difficult to pursue the reason.
However, there are some common points you can refer to when applying for a guarantor company. Those information is based on assuming Japanese applicants so some of conditions may not correspond to your circumstance but I believe it’s useful to know beforehand you sign on a agreement with a guarantor company.
Contents
Point 1, The ratio of rent payment to income
A guarantor company set the ratio of rent payment to income as around 30% for screening standard. Depending on the guarantor company, its ratio is set less than 30%.
For example, if you receive monthly salary 200,000 yen, 30% of your salary will be 60,000 yen. Allocating 60000 yen from your salary to your rent payment is ideal for a guarantor when passing the screening.
However, if your income level is less than Japanese average income level, even though you satisfy this 30% rule, the rest of living expenses is directly influenced to your living standard after paying rent.
For example, if your monthly earning is 100,000 yen, you will be guaranteed to stay in an apartment whose rent is 30,000 yen or less monthly under the condition of 30% rule. But
The rest of living expenses need to be covered from 70,000yen.
Generally, Making a living in Japan on monthly 70,000 yen except for rent costs gets you to force hardship especially in Metropolitan city in Japan. In this circumstance, if you are in trouble or become ill which stops you from going to work, you become insolvent in a twinkling.
Please remember, a guarantor company will not only pay attention to the ratio of rent payment to income but also screen whether you can keep paying rent constantly as covering Japanese average living expenses with the rest of money.
Point 2, Rent price and guarantee area
A guarantor company is worried about the possibility to collect overdue rent from you when you fall behind in rent. If 30% rule is executed, a tenant is hardly insolvency but generally, the higher the rent of an apartment, the more difficult it is to collect overdue rent.
Even though you clear the condition of the ratio of rent payment to income required by a guarantor company, if you rent a room costing you 200,000 yen per month, generally it is really difficult to prepare several months overdue rent. This is the point a guarantor company concerns about.
In contrast to this, if you rent a room costing your 30,000 yen per month. even if you become insolvency, you can manage to rase funds from credit card system in the worst case. Debt screening for 30.000 is not so hard.
A guarantor company sometimes shows disapproval to the case where your rent is much more expensive than any other general apartment rents. Temporary increase in salary will not convince a guarantor company to live in high class apartment.
The possible reason of disapproval is length of your service and your occupation. If you work for a company for few years, you will not be accepted.
For example, if those who are twenties with less career in a company applied for an high class apartment which is subject to a person who is about 40 years with long career in a company, what would think that a twenties applicants move in this apartment from the position of a guarantor company?
Point 3. occupation, age, cosigner
Your occupation, age, cosigner (a landlord request you a condition to find a cosigner although you make a consignment contract with a guarantor company) is subject to screening. They will find several points to be able to collect overdue rent.
For example, if your cosigner is one of your parents who still work, overdue rent is easy to be collected. If your occupation is quite secure enough to have credit in public such as an advisory consultant for Japanese government or a lawyer, overdue rent is easy to be collected. And if you are still young, it is relatively easy for you to get a job so overdue rent is easy to be collected.
In other words, if your age is 60 years old, it is pretty difficult to find a place to work. A guarantor company will look for other factor to be compensated for overdue rent.
For example, moving in with your family is much better conviction than moving in by yourself in this case.
Point 3, Your moving reason
If you move from other prefectures, clear reason why you need to move from the present apartment and why you decide to rent an apartment there is also subject to screening because there are the risks of sublease and name lending.
A guarantor company prioritizes collecting overdue rent. If a tenant has a intention to use an apartment for sublease or name lending, just in case a tenant fall insolvency, there is possibility to miss collecting overdue rent because a tenant is out.
For example, If you have never lived in Kyoto and don’t have acquaintances there without any clear purposes, you are pursued the reason why you want to live there. You fall under suspicion if there is something behind you. If you don’t have clear persuasive story to move in the city, you are probably required to submit additional documents to convince a guarantor company.
Point 5, Understanding Japanese
There are so many guarantor companies setting a condition that you understand Japanese. This skill is persistently required when you make a contract in Japan.
Even though you work for a global company that nobody doesn’t know and you have Japanese cosigner, if you don’t understand Japanese when something happens, the problem will not be solved.
If you communicate with Japanese through interpreter, you should look for a guarantor company which has a staff speaking English and prepares a contract written in English.
Point 6, Cosigner
You are rarely required to find a cosigner depending on the guarantor company. A cosigner can be your friend ,your boss and other possible acquaintances whom you are familiar with . However, when considering to prioritize collecting overdue rent, your cosigner should be Japanese with whom you build good relationship.
In rural area of Japan, in case of single cheap apartment costing you 40,000 yen to 50,000 yen, even a pension recipient will be passed as a cosigner depending on the company. In contrast, in case of high-class apartment costing you 100,000yen to 200,000 yen, a cosigner is required the equivalent solvency with a tenant to cover this much rent per month so screening standard for a cosigner differs in accordance with how much the monthly rent is.