Should I take a potential tenant with credit score of 524?

Question

Good Morning everyone,

This potential tenant is a RN with a retired/disabled husband and her adult daughter, a single mom with Borderline Personality Disorder and her grandson. They have move than enough income to pay the rent. The reason for their move is to find a better school district for the grandson. While I was verifying the employment and rental history, the information they provided seem to be true so far. They missed paying rent 15 times during the 5 years they have been with the current landlord range from 1 day late to 15 days late and was serviced rule to evict 3 times 4/5 years ago which were settled later on.

When I asked her to accept my request for her credit report, this is what she told me:

" I will tell you that my credit score is not great, my ex husband unfortunately caused many issues for me when we separated and I am working with the Credit Warriors to have my report cleaned up. It is a frustrating and long process and frankly embarrassing but I think it is important for honesty."

I was shocked to see her credit report with a score of 524 and the following information. She is the only applicant I have right now and our communication was good so I really wanted to make this work but I don't have peace. I am not realtor. I only rent out my own spare house. I would like to hear some insight from more experienced landlord than me. Any input would be appropriated!

Profile Summary

Derogatory Items  Public Records:1Number of Collections:8Number of Negative Trades:9Tradelines with any Historical Negative:4Occurance of Historical Negatives:35  Revolving Past Due Amount:$0.00Installment Past Due Amount:$753.00Mortgage Past Due Amount:$0.00Open Account Past Due Amount:$0.00Closed With Balance Past Due Amount:$4,479.00Totals Past Due Amount:$5,232.00  Revolving  Number of Revolving or Check Credit Trades:9High Credit:$0.00Credit Limit:$0.00Balance:$0.00Monthly Payment:$0.00% Credit Available:0 %  Installment  Number of Installment Trades:6High Credit:$41,031.00Credit Limit:$0.00Balance:$36,169.00Monthly Payment:$565.00% Credit Available:0 %  Mortgage  Number of Mortgage Trades:0High Credit:$0.00Credit Limit:$0.00Balance:$0.00Monthly Payment:$0.00% Credit Available:0 %  Open  Number of Open Trade Accounts:1High Credit:$0.00Credit Limit:$0.00Balance:$0.00Monthly Payment:$0.00% Credit Available:0 %  Closed With Balance   High Credit:$0.00Credit Limit:$0.00Balance:$4,554.00Monthly Payment:$0.00% Credit Available:0 %  Totals  Total Number of Trades:16High Credit:$41,031.00Credit Limit:$0.00Balance:$40,723.00Monthly Payment:$565.00% Credit Available:0 %   Number Of Inquiries:14

Derogatory Items

Public Records:1Number of Collections:8Number of Negative Trades:9Tradelines with any Historical Negative:4Occurance of Historical Negatives:35

Public Records:

1

Number of Collections:

8

Number of Negative Trades:

9

Tradelines with any Historical Negative:

4

Occurance of Historical Negatives:

35

Revolving Past Due Amount:$0.00Installment Past Due Amount:$753.00Mortgage Past Due Amount:$0.00Open Account Past Due Amount:$0.00Closed With Balance Past Due Amount:$4,479.00Totals Past Due Amount:$5,232.00

Revolving Past Due Amount:

$0.00

Installment Past Due Amount:

$753.00

Mortgage Past Due Amount:

$0.00

Open Account Past Due Amount:

$0.00

Closed With Balance Past Due Amount:

$4,479.00

Totals Past Due Amount:

$5,232.00

Revolving

Number of Revolving or Check Credit Trades:9High Credit:$0.00Credit Limit:$0.00Balance:$0.00Monthly Payment:$0.00% Credit Available:0 %

Number of Revolving or Check Credit Trades:

9

High Credit:

$0.00

Credit Limit:

$0.00

Balance:

$0.00

Monthly Payment:

$0.00

% Credit Available:

0 %

Installment

Number of Installment Trades:6High Credit:$41,031.00Credit Limit:$0.00Balance:$36,169.00Monthly Payment:$565.00% Credit Available:0 %

Number of Installment Trades:

6

High Credit:

$41,031.00

Credit Limit:

$0.00

Balance:

$36,169.00

Monthly Payment:

$565.00

% Credit Available:

0 %

Mortgage

Number of Mortgage Trades:0High Credit:$0.00Credit Limit:$0.00Balance:$0.00Monthly Payment:$0.00% Credit Available:0 %

Number of Mortgage Trades:

0

High Credit:

$0.00

Credit Limit:

$0.00

Balance:

$0.00

Monthly Payment:

$0.00

% Credit Available:

0 %

Open

Number of Open Trade Accounts:1High Credit:$0.00Credit Limit:$0.00Balance:$0.00Monthly Payment:$0.00% Credit Available:0 %

Number of Open Trade Accounts:

1

High Credit:

$0.00

Credit Limit:

$0.00

Balance:

$0.00

Monthly Payment:

$0.00

% Credit Available:

0 %

Closed With Balance

High Credit:$0.00Credit Limit:$0.00Balance:$4,554.00Monthly Payment:$0.00% Credit Available:0 %

High Credit:

$0.00

Credit Limit:

$0.00

Balance:

$4,554.00

Monthly Payment:

$0.00

% Credit Available:

0 %

Totals

Total Number of Trades:16High Credit:$41,031.00Credit Limit:$0.00Balance:$40,723.00Monthly Payment:$565.00% Credit Available:0 %

Total Number of Trades:

16

High Credit:

$41,031.00

Credit Limit:

$0.00

Balance:

$40,723.00

Monthly Payment:

$565.00

% Credit Available:

0 %

Number Of Inquiries:14

Number Of Inquiries:

14

Nathan Gesner · Answer

I'm with Peter. I won't rent to anyone that's been evicted in the past five years. On top of that, you have 15 missed payments? On top of that you have poor credit? And then you're "shocked" to discover she has bad credit? The only thing that would shock me is if she had decent credit.

You really need to up your standards or real estate investing is going to eat your lunch and give you a wedgie to boot.

Peter Tverdov · Answer

When I saw "missed paying rent 15 times" I immediately stopped reading the rest of your post.

The answer is hell no. Next applicant.

/thread

Anna Sagatelova · Answer

@Ping W. In addition to the great advice you received above, I'll add what nobody else has mentioned: when looking for advice on how to evaluate a rental applicant in the future, don't include any information about their disabilities. It is entirely irrelevant and you should never consider it in your assessment of the applicant. Even including it in your description gives the wrong impression.

Jill F. · Answer

Read about the types of behavior symptoms associated with borderline personality disorder. Not what I want to deal with. Personality disorders are  kind of a grey area, they aren't considered mental illness but sometimes people do manage to get on disability as a result and would then, I believe be in a class protected by fair housing laws. But generally they are such difficult people they have a lengthy history of disqualifying behaviors.

Max Versteppen · Answer

Yes, if you are eligible for a VA loan, you may be able to qualify with a 524 credit score. Can I get a jumbo loan with a 524 credit score? ... Most jumbo mortgage lenders require a borrower to have a credit score of at least 680. However, there are some non-prime jumbo lenders that go down to 580.

Braden C. · Answer

Good decision to deny, you would be setting yourself up for problems. At this point, I wouldn't respond to her any longer, just completely ignore her. I HIGHLY doubt she spoke with a real estate attorney, she is just trying to scare you. The more you respond the more it's just going to fan her flames.

Charley C. · Answer

I highly doubt she is getting attorney But whenever you can settle with anybody for any reason for such a small amount do it.

From this point forward: when you do your written policy just make sure you’re not breaking any of the housing laws. Read what is written above me,  it’s all extremely good advice

With my apartments, I do pull credit on the only the person with the income but Usually don’t  with jobless dependents

I do run a criminal background on everybody anybody staying their more than 2 weeks .. You might want to refund her the difference between the criminal background and credit compared to just a criminal report;  it might be $10 a person and you can pay her $20 .. And if it were the same price ? you owe her zero Does not sound like you’re a good fit to get real complicated and detailed on how you approve and deny people so keep it real simple. I would avoid conversations with her.  I would avoid long emails and you dictate the script As a final farewell

Dick Rosen · Answer

We don't consider Credit Scores at all but I'm certainly zooming in on the rent payment history and eviction history. The are rejected and I wouldn't care if they had an 800

Ping W. · Answer

Thank you very much for all your insight. I think turn her down was a right decision. Now she is asking for a refund for the application fee although it was stated on the application form that it was non refundable. She is saying I only checked her credit history so I should refund her with her husband and her daughter's application fee. She is saying this is a fraud after they talked to a real estate attorney.  I am not a realtor and I only rent the only one of our spare house. From the legal perspective, should I refund her the balance?

Kyle J. · Answer

@Ping W. It sounds like you don't have any written tenant-screening/selection criteria and kind of just go with your gut.  That's not good.  It's harder on you because, as you can see, it can make you indecisive on applicants like this when your emotions come into play (you know you shouldn't take her but you "want to make this work" because your communication was good).  It's also not fair to the applicants because they don't even know what it takes to rent from you when they apply.

So in the future, you really need to come up with some written tenant-screening/selection criteria.  It'll make your life much easier.  Trust me.

As for this applicant, I agree with the others, it's a hard pass.  She was 15 times late with the rent, and her current landlord had to file to evict THREE TIMES (who cares if she wasn't actually evicted - she still made him file).  One time would have disqualified her with me.

Lastly, it's a little hard to read the way it formatted, but it appears from the credit file you posted that she's had 14 recent credit inquiries.  That usually means one of two things: 1) She's trying to open a lot of new credit accounts, or 2) She's applied to rent at a lot of other rental properties and they also checked her credit and declined her.  Either way, it's a red flag.  Don't be the one that accepts her.  It won't likely turn out well.

Should I take a potential tenant with credit score of 524?

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