What's Your Credit Score Threshold For Tenants In C+ SFH

[Michael Glaser]

In the process of closing on 4x SFH homes. C to C+ neighborhood with great cash flow. I have one unit that's unrented and another where the inherited tenant is consistently late and will likely have to move with the next 6 months.

I'm wondering what your credit threshold is to those in this type of working class, blue collar, lower income neighborhood?

[Chris Mason]

Hi @Michael Glaser,

As a landlord, you should not be looking at FICO score. You should be looking at credit history. Read the credit report, and the story it tells you. That's what will tell you if this is someone you want to work with or not.

As a lender, I must look at FICO score. And I immediately commence to hacking it. Sometimes, for example, that means I tell someone to put the credit card away, take the debit card out, and stop chasing rewards points for a month. Poof, that can be a 75 point FICO bump. That right there should tell you how worthless FICO scores are.

If FICO score had anything to do with creditworthiness, I wouldn't be able to hack it five ways from Sunday as easily as I do, often at absolutely no cost to the consumer. As a landlord, you have no way of knowing that the 720 FICO person wouldn't have a 615 except for the fact that the tenant applicant in question is a personal buddy of mine (or someone like me). You also have no way of knowing if that 635 FICO person just does something that FICO is too stupid to understand, like chase credit card rewards points (is it inherently a sign of irresponsibility that someone racks up $5k in credit card debt each month, that they pay off immediately, never paying interest on the debt, and collecting rewards points to boot to pay for their hobbies, so that their hobbies are funded by Visa instead of by their paycheck? Hell no, it isn't, it's a sign that they are smart!).