Scoring Prospects Like a Credit Report 7 posts by 4 users

Posted: 09/10/2008 at 12:55PM

I just put up an article on avoiding the appearance of discrimination and mentioned the tenant scoring system I use to vet prospective tenants. I feel this is the best method for accurately comparing prospects and would recommend it to other landlords.

The system uses two parts. The first is a composite score which assigns points to different factors. You then set a minimum score which any prospect must meet to be considered.

I won't give all the details here, but suppose you set a min score of 25. One component of that score is going to be tenant history. A 0 would be somebody who had been a tenant before and had gotten a bad reference from the last landlord. An 8 is someone who had been a tenant before and gotten excellent references.

I do the same with job history, arrest record, annual income minus required commitments, and credit history.

The other component is required scores. Don't rent to somebody with a score of 0 for job history (no job), unless there is a qualified copayer signing the lease or substantial cash in the bank.

The system has the benefits of being non-discriminatory, completely fair, and flexible. It will take an hour to set up your scoring system (mostly figuring out how to weigh different things), and then moments to plug any prospect into it.

What do you think?

Posted: 09/15/2008 at 06:25AM

What's wrong with just having specific criteria, then taking the first candidate that meets the criteria?

Having this scoring system would make sense if you had a lot of candidates and wanted to choose the very best.

Of, if like lenders, you have a lot of produce to sell, but price it differently depending on the borrowers circumstances.

Posted: 09/16/2008 at 08:27AM

I don't like the system. I place a higher weight on certain aspects of tenant.. Evictions, nope.. Sell's drugs, nope.. No job, nope.. Credit score of 300, perhaps. Wrapping everything up into one over all score, does not account for certain things that will automactically stop someone from being considered.

Posted: 09/17/2008 at 11:13AM

I think we're talking about similar means to get to the same goal. Absolutely there are some "no way" criteria. Jon's are pretty smart. There are others he doesn't mention but I'm sure he uses - like a record of nonpayment to the previous landlord. Other than that you have to be flexible, but the scoring system lets you set objective weights to different areas.

It's also very solid defense against discrimination suits - when the housing advocate comes a-calling, she's going to want to know why you rejected her client. It's very helpful to be able to present objective criteria and say "this is how I compare people every single time.