Prospective Tenant with Income but Bad Credit

[Jen B.]

Hi There,

I am finding myself a landlord again after a few years off and researching and familiarizing myself with everything all over again!
I just listed a house for rent using Zillow and received one application before a tour. The applicant meets the minimum income requirements of 3X rent but a couple things stand out as concerning to me and I'm wondering if you would consider this application further or not:

-Credit Score came back as 548 Challenged. There are typical loans on there - car and education loans. What concerned me was that there are 8 late auto loan payments since September 2022, with the last one being just 2 months ago. 

-Considering the late recent payments, I am then concerned about how much more this rental costs compared to what they are paying now. It is $1000 more than the current rent. 

-Lastly, their credit usage is reported as 117% of credit. 

There are no collections reported, and nothing came up on background check. Would this be enough for you to deny this application, would you ask for further information about the late payments, or continue processing the application?

Thanks for any advice

[Greg Scott]

I would deny.

We often accept people with bad credit but under specific circumstances.  If someone had a huge medical bill they couldn't pay, but otherwise pay their car, utilities, cell phone, etc, they are probably a reasonable risk.  Your prospective tenant looks like he is prepared to bury himself in debt.