How much do you weigh credit history when it comes to screening?

Tenant Screening
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How much do you weigh credit history when it comes to screening?

Taylor Wilson
Rental Property Investor · Austin · Member since 2022 · 33 posts · 11 votes

Curious how much others weigh credit history when it comes to your screening process? I recently pulled my own report using SmartMove and there were several inconsistencies when it came to the number of credit lines and history. I realize I have a common name but now I'm wondering about the accuracy of these reports and whether it's necessary to include as a part of my process. I'm already verifying employment/income and checking references.

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Richard F.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
3y

Aloha,

It really depends on where exactly the data is coming from. I have been pulling reports direct from Equifax for most of the past 30 years. It typically is the most important document that I review, depending on the depth of info provided on a particular subject. I do not focus on the FICO score, but rather what trade account, collections, and other info contributes to that score.

Other sites aggregate pieces of information from multiple sources which may be more or less accurate than the Big 3. They each have their own algorithms for determining their particular score or grading value.

I am looking for Bad Habits, in all areas...financial, legal, reputation, online presence, and employment. I also have consideration for events that people typically have no control over. Medical bills, older foreclosures or bankruptcies with a clear path of redemption, divorce, and other events...if the person is upfront and there is evidence to support significant improvement overall.

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  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    3y

    Aloha,

    It really depends on where exactly the data is coming from. I have been pulling reports direct from Equifax for most of the past 30 years. It typically is the most important document that I review, depending on the depth of info provided on a particular subject. I do not focus on the FICO score, but rather what trade account, collections, and other info contributes to that score.

    Other sites aggregate pieces of information from multiple sources which may be more or less accurate than the Big 3. They each have their own algorithms for determining their particular score or grading value.

    I am looking for Bad Habits, in all areas...financial, legal, reputation, online presence, and employment. I also have consideration for events that people typically have no control over. Medical bills, older foreclosures or bankruptcies with a clear path of redemption, divorce, and other events...if the person is upfront and there is evidence to support significant improvement overall.

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  • Taylor Wilson
    OP
    Rental Property Investor · Austin · Member since 2022 · 33 posts · 11 votes
    3y

    Thanks, @Richard F.! What you said about giving someone a chance to address their credit history, especially those types of events (medical debt, older foreclosures etc) is something that definitely resonates. Thinking about how I can update my application process to give them that opportunity to explain any potential issues upfront. 

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  • Cliff H.Pro Member
    Rental Property Investor · Nashua, NH · Member since 2014 · 587 posts · 477 votes
    3y

    Entirely depends on the area. Class A, B, or C property?

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  • Melanie ThomasBusiness Member
    Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
    3y

    I have a pretty awesome screening criteria I am happy to share with you. Please message me if interested. Linking here is seen as advertising and blocked. Create a screening criteria and stick to it for every single applicant. Good luck & happy investing! 

    [email protected]
    RentWerx Property Management4.73300 Reviews
    WebsiteView Page
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  • Laura Stayton
    Property Manager · DE · Member since 2023 · 248 posts · 133 votes
    3y
    Quote from @Taylor Wilson:

    Curious how much others weigh credit history when it comes to your screening process? I recently pulled my own report using SmartMove and there were several inconsistencies when it came to the number of credit lines and history. I realize I have a common name but now I'm wondering about the accuracy of these reports and whether it's necessary to include as a part of my process. I'm already verifying employment/income and checking references.

    VERY heavily rely on credit, criminal, eviction and screening reports to qualify tenants.  Our owners have established protocol for what they will accept.  Check rental references, verify income, etc as well but this is key.  With credit karma etc you can check your reports as often as you like and make sure any inaccuracies are removed.  
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  • Shanea Fulks
    Real Estate Agent · UT · Member since 2023 · 18 posts · 6 votes
    3y

    Criminal and Eviction YES. Job history and proof of income YES. Credit yes. However I can look past medical and student loans. Im looking for Repos, evictions, etc.

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