I used to put in my ads "All applicants will undergo credit/eviction/employment/background/landlord/criminal checks. 

They discriminate against those with a criminal history; they discriminate against those who don't pay their rent; they discriminate against those who trash their previous landlord's unit; etc.  

What is the best way to handle the criminal background/credit check fee? 

Is it illegal to offer discounts of say, like a $25.00 discount for people who have good credit, discount for having held the same job with the same employer for over a year, a discount for not having any criminal record, discount for being a non-smoker, having a positive non-family related rental history and maybe a commuters discount?

If they give you a phone number for their work or supervisor, google the business and ask for the HR dept, instead of using the name and number they gave you.Any lies or discrepancies they give you are valid reasons to deny them.Pay for every single type of check you can do on them, credit/background/criminal/eviction/identity, etc. 

Wow, sounds pretty criminal - pocketing the rent in 'his' name, instead of collecting it for owner/landlord - than just 'civil'.Agree the PM likely paid for court filings, but there should be a bill, not a pocketing of all the rent collected. 

Many jurisdictions have switched to redacting SSNs from criminal [and civil] records before they are released.

Will there be a problem with running a credit/criminal background check on all applicants over 18 years old at a cost of $25 to each applicant?

No criminal record and a credit score of just under $700. 

Don't be cheap on screening - do background, criminal, credit, employment, eviction.