Should I deny this application from a prospective tenant?

Question

Hi,
This is my first time screening tenant. I use mysmartmove to run credit and criminal check on this applicant.  The resullt shows his credit score is less than 500, with several outstanding, unpaid credit cards and crimal report  shows he was in probation 10 years ago because of carrying weapon. Should I immediate deny this applicant without running any further reference check? I haven't requested a credit and criminal check on his wife yet. Don't want them to waste more money if I am going to deny them anyway.
Any advice is very appreciated.

Tina.

Connie Silva · Answer

Tina,

Prior to renting any property you should set up your criteria. I will share with you what mine are and I have very few problems collecting rent and rarely have to file for an eviction and I manage 108 units. Income should be at least four times the rental amount. I do a credit check and only look for outstanding major utility bills, no eviction filings within the last 48 months, 10 year national criminal background check, no serious misdemeanors or felonies, 100 year for sex offenses. Take the time to contact the previous landlord and cross check the address listed on their application to the credit report.
You can google for companies that have all in one reports that check credit, criminal and evictions. I cannot suggest the company I use as they are only for companies with a specific amount of units.
Be very careful with the whole I will wait until I meet them approach. Discrimination is no joke and having a criteria and following it protects you from discrimination claims.

Good Luck

Joel Owens · Answer

If you consider it you should require they pay 4 months in advance.

This will cover them paying the first months rent,time to immediately evict them if they violate a provision in the lease,and cover paint and carpet again.

If they violate the lease for any reason all the money paid upfront is NON-REFUNDABLE.

Don't just stick a tenant in there to put one in.Make them meet extra security demands or wait on a better tenant to come along.You have to make a tenant like that have a bunch of "skin" in the game.They may or may not have reformed themselves and if they have they should not mind putting extra down.

Nathan Emmert · Answer

What are your criteria for accepting people?

For me, I'm more worried about evictions then credit.  If they are behind on credit card payments but paying rent, as a landlord, I don't really care.

The one thing I do look for is judgements against them.  That could cause some wage issues (garnishment).

Based on your post, it's clear to me you aren't comfortable renting to them.  If you have less than 4 units you can deny renting to anyone for any reason.  Say no and move on to someone you are more comfortable with.

Tina Nguyen · Answer

Thanks a lot for all of your inputs. I haven't met them yet.  I am going to meet them in person at the house tomorrow.  Will see if I'd feel more comfortable renting to them.  Definitely will call their previous landlords.  The credit report doesn't show the evictions.  How do I find out these information?

Harry M. · Answer

I'd be concerned with credit that bad. As Joel, mentioned eviction history is the most important. Beyond that, I think the important thing to determine is whether the bad credit was due to an isolated life event or whether it is an ongoing situation. One of our prospective tenants had some credit problems - but they were all concentrated in one period 4 years ago and due to specific life events.
Everything since then was in good shape. We saw this for it was - some folks dealing with difficult life events - and accepted them. It was a good choice. They've been great tenants for over a year now.
On the other hand, I would be very leery if a person has lots of different credit problems and the situation is ongoing. That says to me that the persons finances are a mess, and I'd stay clear.

Silvio Brigliadoro · Answer

I think the answer will be: it depends. Are you ok dealing with this tenant AND his past?

If he defaults on his lease, leaves your place a wreck @ move-out, or he is just a problem tenant, you will have to evict him and/or file a law suit to collect for damages. Will his past make you nervous or afraid to act?

On the other issues, I'm with Nathan and Joel; who has great credit these days? That may be the core reason they will be renting all of their lives. If you have good management skills you could make it all work out.

Sharad M. · Answer

I am not sure if this is correct, I believe what Nathan is saying applies to owner-occupied properties with no more than four units.

http://www.housingrights.org/askhri/faqs.htm#holl

Should I deny this application from a prospective tenant?

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