Great Prospective Tenant, But Bad Credit Score?

[Cassandra Brown]

We are first time landlords doing an owner-occupied duplex. We just had our first showing of the rental side yesterday and liked the potential renter. She filled out an application through Cozy.com and her background check came back spotless, but her credit is in the lower 550's. She told us she recently went through a divorce and is working to get her finances back in check. The issue mainly seems to be with her credit card payments. If she checks out financially with previous landlords (never been late on rent), should we still consider her? We were going to make 600 our credit cutoff. What questions should we be asking ourselves and the potential renter? 

[Cassi Justiz]

Some of my best tenants are ones with "bad credit." I don't care about the credit score, but I look at overall credit trend. Were they making payments on time before divorce, are they currently making mostly on time payments. Also I look at collections. If someone has been sent to collections once or twice, it may have been a mistake or rough patch. 

Real example: I looked at an app a few weeks ago and in the past two years the applicant had been sent to collections by every major internet/cell service provider. She averaged a new collection account every 4 months. That's a trend, not a random incident. This is in contrast to an applicant that I approved. This applicant had several accounts go to collections during a 6 month window while she was getting her divorce settled.