Deny applicants because ONE doesn't fit minimum qualifications?

Question

Hi, I have a couple who applied for one of my units. I have not had the best gut feeling about them from the beginning. After running their applications (background check, credit, etc.) everything has come back satisfactory (a few exaggerations made on the pre-screen like claiming $800 a month more income than actual but nothing horrible) except for ONE applicants credit. Our minimum credit score is 600 and they fell about 50 points below (also showing delinquent accounts, multiple 30 days late). The other applicant meets all criteria (just above the 600 mark). Am I justified to deny the applicants based off one of their credit scores alone or should I justify with multiple/another reason. Thanks for the input :)

Mitch Messer · Answer

Hi @David Stone. Our position is that each applicant has to meet the minimum qualifications.Otherwise, you might get your couple moved in, then there's a fight and the "good one" moves out. Now you're stuck with the fuzzy end of that particular lollipop!For the record, we don't use credit score as a screening factor (we do lease/options and we're in Georgia), but if you are going to have minimum standards, you've got to be 100% consistent.

Thomas S. · Answer

Screening tenants should be as close to 100% cut and dry as you can possibly make it. The decision to reject should be automatic based on strict pre defined standards. The only part about screening that is not cut and dry should be selecting the best applicant from those that do qualify. Once a landlord establishes ridged clear cut screening standards the decision to reject is always made for you. When a landlord has to think about whether a applicant should or should not qualify it is because they have allowed their personal emotions to enter into the process. Credit score, criminal record, employment record, income level, eviction record, payment history, bankruptcy. You set your standard for each criteria and never waver. That is the purpose of having standards.

Colleen F. · Answer

If your criteria is all applicants must have a score over 600 send an adverse action letter stating that they don't meet the criteria (they are renting jointly right?)

Joe Splitrock · Answer

@David Stone We look at average credit score of applicants, so if one applicant is much stronger, it can pull up the other. It doesn't sound like that is the case here. We also look at more than just the score in the report. Recent payment history is important. If late payments were two years ago, that is way different than multiple accounts currently late. Even worse is if accounts are in collections or if there are judgments.I would deny based on combined credit score too low and late payment history.

Amy Beth · Answer

@David Stone. I would deny them based on a deliberate lie about income ($800 is too much of an error to be a mistake). If you catch them in one lie there are probably plenty more lies. Also because of your bad gut feeling. If it was my property though I would just tell them they did not meet the screening criteria.

Lee Bell · Answer

@David StoneOur minimum standards state "Applicant must exhibit a responsible financial life as determined by landlord." No offense, but that is super vague. I have no idea where you draw the line. Can you define it more explicitly?

David Stone · Answer

True @Kevin Sobilo, Great points! We have a credit score minimum but also take into account factors such as delinquent accounts, amount owed to past debtors, type of debt (medical we don't weigh as heavily). In this current situation, the couple had multiple delinquent accounts and owed over $4,000 in past consumer debt. This reflects in their credit score. I believe having a number to base decisions off of makes it easier to be "equal" when it comes to multiple applicants. Our minimum standards state "Applicant must exhibit a responsible financial life as determined by landlord." We do accept no/lack of credit because some people choose not to put themselves in debt and we think that is great (we do require additional security deposit)I appreciate your input on this as it is true that vetting tenants is not 100% cut and dry.

David Stone · Answer

You could ask Brandon Turner, it's from his book Managing Rental properties :) It's vague for a reason because I can't spell out every situation that could lead to an applicant being accepted or failing except for something like a credit score number. I take the totality of circumstances in making a decision on the most qualified applicants who met the minimum qualification standards but the credit score # is a hard number I can draw the line on. (my old standard stated "Applicants must have suitable credit history as determined by landlord" before I changed it... both are vague)

Caleb Heimsoth · Answer

@David Stone if they don’t all meet your minimum you deny them all. Granted having minimum credit scores Of say 600 be 550 isn’t really going to affect you getting paid as the landlord. Now if it’s 720 and 520 that’s different but most mid 500s scores means about the same as low 600s.Anyways you just deny the application.

Michael Noto · Answer

Deny them unless this property is in a bad area and you can’t expect to get anyone better.