Tenant screening with SmartMove, good credit score but bad debt?

[Cooper B.]

I don't have much experience with tenant screening but I came across something today that I can't figure out.

I pulled a credit report from TransUnion / SmartMove on a potential tenant.  They recommend that I accept the tenant, and give a "Resident Score" of 789. This is the first time I have used this service so I don't really know what the "Resident Score" means.  Is it supposed to be similar to a FICO score?

What is confusing me is that in early 2014 there were 2 credit card accounts that were closed and charged off as bad debt with balances of over $25k.  There is also a mortgage showing up that was closed in early 2015; under remarks it states "Settled - less than full balance".  

I asked the potential tenants about the credit cards and he stated that he had a major medical issue 2 years ago and told the credit card issuer that he couldn't make payments, then he never heard anything else about it and didn't ever receive any more bills.

To me this seems like some pretty significant red flags, yet the automated recommendation is suggesting that I should accept the tenant.  There are a number of other accounts in good standing, but those charge offs were just last year.  

Anyone out there have any experience with the SmartMove service that could give me any advice here?

[Jacob Blackett]

Hey Cooper! I haven't used SmartMove, but my screening service also gives automated recommendations. In general, I stick to the main factors:

1. Rent history- good reference, would previous landlord rent to them again, no evictions in the past 5 years, etc. 

2. Job history & income requirement- are they clearing 3x the monthly rent in take home pay minimum? what other monthly expenses do they have? 

3. Credit score- like you stated there are red flags here. Per your description of this applicant, if 1 & 2 above is not STRONG, then I'm moving on and getting more tenant options. If the individual has had some credit issues, but can prove to me they have gotten it together the most recent 12 to 24 mos e.g. can show me payment history on their current CC's, bills, etc, then there's some possible consideration, assuming 1 and 2 above are strong also. 

So in summary, I use the automated software only as a guide- the tenant approval process can be a complicated one sometimes- the more complicated it gets, the more you should be thinking about getting more options. 

Best- Jake