Discrimination and tenant credit report?

[Bienes Raices]

I'm getting ready to set up to start doing credit reports for the applicants.

I understand that you have to send the tenant a letter with the reason if you reject them due to negative information on their credit report.

However, are you allowed to make a judgement call on each individual tenant based on the totality of the information on their credit report, income, etc., or do you need to set up strict rules in advance for the credit report (i.e. up to $500 unpaid medical bills allowed, no bankruptcies, no child support in arrears) and not deviate from that?

The reason I'm asking is because I've seen posters on here say that a bankruptcy may not necessarily be a bad thing, it depends on which type of bills are being late paid, etc. So evaluating the credit report seems rather subjective. What is the best way to evaluate the actual credit data (not just a score), and avoid discrimination or the appearance of discrimation? thanks

[J Scott]

You should document (and consistently adhere to) your criteria as specifically as possible, as this will best help you to avoid losing a discrimination lawsuit.

While it may not be possible to document every parameter, getting as specific as possible may help you down the road...