questions about collections on credit report

[Cecil Tee]

hello all,

When analyzing a credit report how do you weigh past collections? I had an applicant with a three accounts that had gone to collection, but they were in total "only" about 2500 and the most recent was 2017. She also had one actively delinquent account that she said was supposed to be a business account but that didn't really clear it up to me.  

I ultimately passed on this person because in addition to the above they couldn't verify income plus no real rental history further than a year back. I could have been flexible on the credit problems or the unverifiable income or weak rental history but didnt feel good when it was three different yellow flags. 

When I explained my concerns about the credit report she chuckled and said that "everybody has collections! especially if you want to rent in [this B class neighborhood]." Not true, though. The person that applied after her had sterling credit but unfortunately only wants to rent for a short amount of time (deploying to army early next year). Her statement made me wonder if I was naive in my tenant expectations - My credit is average and my I haven't had anything bad on my credit in 10+ years. How do you qualify too big or too recent?

[Sharon Rosendahl]

I am more flexible if the person tells me before I run the report. One of my best tenants had a bankruptcy. They told me when they applied. This was during the recession so I know it happened to a lot of good people. They always paid the last day or two of the month.

When I make credit exceptions I make sure I do thorough checking and get previous landlords, not just current but one or two before that. I also will try to get a couple of employers.

Medical debt is more acceptable to me. I have had tenants where things crash and burn due to medical issues and they will have medical collections along with other things in the same time frame. Honesty is a huge deal to me. If they tell me up front they get an extra point or two in their favor.

Most people who are not getting the rental because of things like that will just say stuff to try to get you to change your mind. Be thorough and consistent in your backgrounds. I have had houses vacant longer than I want but in the end, it can save you money if you place a no hassle tenant instead of a problem one.