How to turn down a tenant with bad rental history?

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So, I was listening to the BP podcast and the subject of how to do background checks on your renters came up. I was wondering, how exactly would or should you turn down a tenant that has bad rental history so to avoid being taken to court for "discrimination?" Pacifically eviction history? Has anyone dealt with this before? Do you just say "oops we're all full at the moment.?"