First rental - Applicant screening

[Tim Southerton]

Hi folks,

My wife and I have our property listed, created screening criteria, have done a few showings, and we have 2 applicants so far. Like everyone I'm looking for the elusive perfect tenant, but both of these applicants have some credit issues so I thought I'd ask for feedback from this community. Ultimately I know the decision is mine, and there is risk whenever placing a tenant but let me know what you think.

Application 1: Family (Husband, Wife, young son, elderly mother) - Wife credit score 640ish, husband is 585. They both have some late payments a few years back for credit cards, and one account was put in collections. They claim this was due to medical issue, premature child birth, and an extensive hospital stay. Everything recent looks current and they say they are back on their feet and working to restore their credit. I still have to verify income but what's reported compared to their current debt ratio looks like plenty. However, they say they were homeowners for the past 12 years, but I'm not finding a mortgage on either credit report. Their home address lists in Zillow that it sold back in April for $1000 which seems insane. Is this some sort of real estate deal perhaps? It seems strange. The wife says it was just her who owned the home and "I sold my ownership rights in April and currently do not have a mortgage."

Application 2: Semi-retired former teacher reporting a much larger income than necessary through new part time job, pension, and social security. Lives alone with her 2 dogs, we're allowing pets with deposit. Credit score much higher, 676, but has one account that shows "Unpaid balance reported as loss" on her credit report. The same bank is listed twice, one with a $0 balance which shows some late payments as well as some on time. The other listing shows all missed payments and looks like a write off. This is for several thousand dollars, which obviously is concerning. Everything else looks good, her score is high, she has landlord and personal references. 

What do you think, any advice? I can always explore a higher deposit, which the first family is already totally on board with. Let me know if you'd decline either or both or any other suggestions you have. Thanks!