Multiple Applicants in Same Household

[Julianne Kauffman]

Hello! 

I have an applicant who submitted her application through Innago and she does not meet my credit score requirement of 600 (she's at 544). She will be living with her husband and grandson however so my question is, should you require all applicants in the household to meet your standards to accept them or do you accept as long as one of the applicants meets those standards? First time reviewing applicants so your input is appreciated, thank you!

[Tim Miller]

We require anyone over 18 to fill out our application and everyone must meet our requirements. I can only imagine what her credit report looks like.

We made the mistake once and allowed a wife to move in with a 500 FICO score. Never again. Good luck.

[Julianne Kauffman]

Quote from @Tim Miller:

We require anyone over 18 to fill out our application and everyone must meet our requirements. I can only imagine what her credit report looks like.

We made the mistake once and allowed a wife to move in with a 500 FICO score. Never again. Good luck.

 Thank you very much for your input! 

[Nathan Miller]

I find most landlords require the primary renter to have a credit score that meets their threshold.  Any additional tenants need to be screened, but their score isn't as important.  IMO, you need at least one person with good credit who wants to maintain that good credit by paying their rent on time.

[Eric Gerakos]

The person who is on the lease should meet your credit score requirement. If the husband has a qualifying score he needs to be on the lease as the primary tenant.

[Richard F.]

Aloha,

Having personally reviewed and screened thousands of applications over nearly 30 years, my view is, and always has been:

ALL Adults that will be occupying the unit must be fully screened, no exceptions. Income verification, Credit report, public/court records, employment and prior residence histories, on-line presence.

ALL Adults must be named on the Rental Agreement, as well as minors.

For "family" groups, whether married, shacking up, multi-generational, etc. there is NO WAY I would expect all to pass the income or credit/public records equally. There is usually a Primary Applicant with significantly higher income and more employment stability. The others will vary in earning power and some may not be employed at all. Will I rent to a group that all have 550 scores? NO. They clearly all have poor financial and other habits, as inevitably borne out on review of their actual report details. In fact, I have never used credit score as a single criteria. I have seen too many times where either a low OR high score was not indicative of the actual, broader, habits of the applicant (for purposes of offering a rental unit). What I DO look at is the overall income of the household, which must meet the 2.5 or 3 X rent amount (dependent on each property), along with the overall stability (in all areas) of that primary.

For Roommate situations, primarily students, individual income is important, and often includes stipends or other resources in addition to part time work. However, co-signers that are also fully screened and show mature stability and significant cash resources are common and perfectly acceptable. Each student generally has a Parent, Grandparent, Aunt or Uncle as a cosigner on the Agreement which names all...students and co-signers. They all sign. There is a specific process to remove or add new Roommates during the term. All Agreements also include the standard "joint and several" clause, which in this scenario virtually ensures full and timely payments.

For "professionals" that are roommates (all named on one agreement), usually all will have good income and background, but if one is weaker, with the standard "joint and several" clause, the better qualified individual will want to maintain their credit rating and resolve any shortages if an issue arises. Income/employment stability, and other issues can certainly vary from one party to another, however the court records and online presence are more critical to evaluate on the individual basis. These type of Roommates may not know each other very well, so one particularly bad apple can indeed ruin it for everyone involved. I have denied one particular individual out of a group in the past, allowing them to find another potential Roommate to move forward with the Rental.

For rent-by-the-room situations of non-students, you DO need each to pass screening individually, since there is no incentive or recourse for any other occupants. Co-signers are  still an option, but generally will not be nearly as well established as a Student's co-signing family member.

So, what is our basic criteria?

We don't care about the score, but what are the reasons behind the score. We ignore medical debts, student loans, foreclosures, and past bankruptcies (over two years). We are most concerned with current and recent "consumer debt" issues. Over two minor collection items; bounced checks; multiple/history of past due payments on consumer accounts; charge-offs; high debt to limit ratios on multiple revolving or unsecured installment loans (noting also the associated monthly payment amounts due against their income); and anything housing related...old utility (including cable, cellphone, water/power) or rent balances from other locales, evictions, and past short term rentals/frequent address changes. Deadbeat Dads (and Moms) that don't pay their child support. These will all typically result in denial, and that decision is usually supported and documented by discovery of multiple other Bad Habits in the public/court records, employment history, online presence, and other data.

In many locales you can no longer consider criminal records. Fine. In my experience, most ax murderers, drug dealers, and wife beaters have more than sufficient OTHER Bad Habits that will easily disqualify them without a lot of effort.

[Wesley W.]

I use the average credit score of all applicants aged 18 and over.  That average must be above the minimum threshold.

[Nathan Gesner]

The recommended policy is that everyone over 18 completes an application and passes your screening. For income and credit, you can combine their scores into one to see if they meet your requirement.

It's very common for a person to apply by themselves to pass your screening, then they will move in their boyfriend with the 510 credit score, two felonies, and no job. You need to screen everyone to ensure that doesn't happen and you should have a strong policy for removing unauthorized tenants when they sneak in.