Application Scenario: One Great Applicant, One Not...

[Peter K.]

I'm working to fill a new SFR I just bought. Application I'm processing right now is a couple who currently live separately, represent themselves as being engaged, and have a baby together. One has excellent income with a good employer, excellent landlord reference, no criminal or court records, all good stuff. The other, self employed, no criminal or court records, but has not paid rent last month or this month. This person has been in their current apartment a year and a half, and other than the current delinquent rent, was given an ok rating by the current landlord.

With just the documented income from the first applicant they more than meet my income criteria.  If the LL reference for the second applicant was decent I was going to pull credit and as long as there weren't any significant judgments outstanding that didn't show in court records, offer them the house.

I'm inclined to offer them the house with double deposit, as my criteria allow increased deposit to compensate for outstanding judgments or poor/lack of rental history.  

So, I'm looking for how you handle a situation where you have one good one not so good applicant.  Feedback appreciated!