Smart Move Recommendation - Not Enough Info - What to do?

Question

Hi Everyone,

Property Location: Albany, NY

Last week I sent a rental application to 3 tenants. One of the tenants is a new applicant as their old roommates are moving out. They were the ones that originally qualified for the entire rent but their roommates were required to be on the list so we all knew who was occupying the apartment.

The 3 tenants finished the applications and turns out to have 5.4x the rent (total annual income / total annual rent).

Smart Move usually provides a recommendation but now it states "Not Enough Information". One of the things it states is the addresses do not match. Well, this is because they were living at the apartment and didn't have anything in their names.

One of the applicants has 8 collections and another has 1 collection. I feel like this may be a problem They have no debts on the credit reports.

No criminal history and not evictions on all 3.

How should have handle this? 2 are living in the apartment now and their roommate about to move out at the end of the month.

Any help would be greatly appreciated.

Can someone share their tenant qualification form/checklist?

Rick S. · Answer

@Andrew Reid the SmartMove Credit Report section should list each separate tradeline along with the Payment History for each so that you can see the payment patterns.  You should have the complete CR through SmartMove.

Marcia Maynard · Answer

@Andrew Reid Was the tenancy working well for you before they wanted to change one of the players? Is this a tenancy you want to save? If so, let them stay. If not, what problem did you have with them as tenants?

I would put very little faith in the credit reports. Even less so if you can't even view the credit reports and are just relying on the Smart Move computer generated recommendations.

As their current landlord, you already know how at least two of them perform as tenants.

You already verified their income is substantial, more than enough.... that's good.

No legal history problems... that's good.

Simple fix for the collections.... verify that the collections are valid and have the tenants set up a payment plan with their creditors. For your interest, getting them down to a fair debt to income percentage is all you need.

It's all about risk. Mitigate your risk by requiring a higher security deposit. When I face applicants with items in collection, I tell them they can pay those collections off, get them into repayment plans, or pay me a security deposit equal to what they owe their creditors. That usually encourages tenants to do the right thing and get their debt under control. Also, consider the type of collection item. Collection to a previous landlord - a definite no. Collection to a utility company - maybe, if they pay the bill in full. Collection Collection to a mobile telephone company - I wouldn't worry about it. Medical bills - get them into a payment plan.

Why aren't you confident in their ability to pay rent? Weren't they paying rent to you before? If I misunderstood your post and they were renting from another landlord, how did that rental history check out?

Whatever you do, establish fair rental criteria that complies with non-discrimination laws and fair housing laws. Screen all applicants against the same criteria. If you turn down this trio because of the collection items, then do so the same for all applicants that you are considering.

Andrew Reid · Answer

So I can disqualify tenants that have collections? If so, I will do so as I am not confident in their ability to pay the rent.

Although, they have been providing their share of the rent to the original lease signers for on time payment. I just don't want to violate fair housing laws in the future if I accept and don't accept on a consistent basis.

Andrew Reid · Answer

How does one get access to the complete CRs? I was using transunion's smart move service.

Jeff B. · Answer

IMO, you just ran into the issue that is solved by getting direct access to experian transunion or equifax to get complete CRs.  The collections & 30,60,90 day lates are what I evaluate AND how recent was the latest of each of these.

For me, collections must be more than a year ago and no lates during the last 6 months.