Sound I take a lower credit score, with larger deposit?

Question

Nathan Gesner · Answer

It sounds enticing, but where are they getting the money? It's likely a tax refund, drug dealing, or stolen goods.

I will rent to a tenant with bad credit as long as everything else looks good (debt:income ratio, Landlord references, etc.) and mitigate my risk with a higher deposit. But when a tenant walks in and says, "My credit sucks but I'll pay you six months worth of rent in cash" it raises my hackles something fierce.

With easy money comes easy trouble.

Thomas S. · Answer

Absolutely not, never take a bribe from a applicant that is likely going to stiff you on your rent. You should not even be on here asking the question. What are your standards, mid 500s you are crazy to even consider these two. Don't expect to see another dime.

If you have screening standards then they either pass of fail. If you do not have screening standards there is no reason to take a larger deposit just hand them the keys and walk away.

Ihe O. · Answer

Since you haven't raised any other concern about them I would rent to them in a heartbeat, for a start 3 months deposit pretty much covers an eviction timeline if any thing were to go wrong. Here are other reasons why.

Name me any other transaction type in which you can envisage a person offering you 6 months payments upfront for a situation that normally only requires 2?

A credit score has almost zero correlation to how a tenant will perform because a persons attitude to debt that relates to the roof over their head is totally different to their attitude to other debt.

It's not just me that thinks that btw. Try and raise finance on one of your rentals, you will quickly learn that financial institutions will lend much more far more readily when you offer your primary residence as collateral.

The most useful thing you can glean from a credit report is their debt income ratio because you would want to know if a persons income is over committed, but a credit scoring is useless in that context because it rewards people that maintain repayments on what might be unaffordable levels of debt.

Shannon Slade · Answer

Not necessarily. I have had several tenants that are great, with low credit scores and have good paying jobs. Divorce, deaths, can cause people to shirk their responsibilities for a while, then try to make it right. Follow through with the other verification's (employment, last 3 yrs of living arrangements, deposits, etc) and if all check out then its a character judgement. Not all of these work out, but I have had some of the best tenants on paper be some of the worst people I could have rented.

Account Closed · Answer

I would but only if they pay more sec. deposit, pass employment screening and have reliable work history. I would also recommend having another adult with a higher credit score sign the lease and agree to be responsible for rent.

Chuy Gonzalez · Answer

Nope. Pass.

Sound I take a lower credit score, with larger deposit?

Sound I take a lower credit score, with larger deposit?

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