Hospital bills on credit

[Champaign Garcia]

Hello all, was just wondering what’s your take on potential tenants having hospital bills on credit which in turn is bringing credit score down?

Do you bypass that and look at everything else and make an exception or do you stick to your guns and only accept minimum scores? (600 and up)

[Brandon Roof]

I think many investors look at credit scores, or income  for that matter, to better determine if the potential tenant will be able to reliably pay for rent during the duration of a lease.  In the case of an individual currently paying down significant medical bills, it's very unfortunate as it's often in our nature to express sympathy and want to go the extra mile to help out.  But if the credit card debt is going to compromise their ability to pay rent, I think the reason they find themselves in their current position becomes somewhat irrelevant to the investor, as there is a reason investors set these "rules" and stick to them, as deviating from them has led to them being burned.

A person in the scenario you described may turn out to be a model tenant, but the more you stretch your rules to make exceptions, the more likely you expose yourself to headaches in the future.

[Russ B.]

It also depends on the state. In some states, there are certain protections from medical bills - in others, they could lead to garnishments and such that would put the ability to pay rent at risk. 

Personally, I wouldn't hold it against someone if they can't pay some obscenely high medical bill, as long as it won't affect their ability to pay rent and the rest of their credit is ok. It's not remotely the same thing as credit cards, utilities, and other consumer debt.