Accept/Decline Tenant? BP SmartMoves vs. Intuition?

6 Replies

So, I recently ran a background/credit check on an interested tenant. BP Smartmoves recommends to decline this tenant, but on their payment history, they've literally never missed one payment. However, their partner's credit is awful with tons of late payments and collections. They both got declined. Bottom line, do you always go by BP's recommendation through SmartMove? Tell me how you make the call. Thank you. 

I just had an applicant that I processed with Smartmove, and they were approved even though they were utilizing 95% of their credit! I always go through their report, looking for collections and late payments. That is what you can expect if they have collections and late payments, that you will probably experience the same thing trying to collect rent from them!

Originally posted by @Joshua D. :

So, I recently ran a background/credit check on an interested tenant. BP Smartmoves recommends to decline this tenant, but on their payment history, they've literally never missed one payment. However, their partner's credit is awful with tons of late payments and collections. They both got declined. Bottom line, do you always go by BP's recommendation through SmartMove? Tell me how you make the call. Thank you. 

 They havent missed one payment on their bills, but what did the landlord references say about on-time rent for both of them? I ask about any late payments, did they have to file in court on the tenant ever, and how did they take care of their unit? Did they get their entire security deposit back. I take landlord references over whether they pay their credit card on time.... Do they collectively make 3x the rent in income so they can stand a chance of paying rent in full and on time? Can they get utilities in their name with bad credit? feel free to share more of these details if you want additional feedback...

When you have a couple applying one with good and one with bad credit it is because they are using the one indivulaes credit selectively to default on monies owed. When screening the credit of one is the credit of both.

When the recommendation is to reject you would be wise to not ignore the recommendation, they know what they are doing, and it is what you are paying for. When the advice is to accept you can then use other metrics, such as attitude, to reject if you choose but never ignore the credit recomendation.

@Joshua D.

I've used SmartMove quite a bit.   The report from SmartMove is ONE aspect of your tenant screening process. As another poster said,  Find out what their current and previous landlords said? Current and Past Employers, etc.     

With that being said if SmartMove recommends you decline BOTH of them, it sounds like your gut is also already telling you what to do.

I would pass......you can always find a better tenant.  

I would dig a little deeper. Do you know the potential tenant's financial standing? Not pay stubs, or W2's. I'm talking about real financial data that will help you learn if the potential tenants will pay on-time. 12 months worth of income, cash flow, assets, and spending habits, to assess if they're truly the right tenants. Seems like you have half the info and can't make a clear decision. SmartMove seems to give good info but I would also use Finret to get actual financial data on your prospective tenants. 

if you can see the details of the credit report it is easier to analyze these types of applicants. It could be that the one partner was a financial mess until the other partner came along and straightened things out; when this is the case, the derogatory data should be older and appear to cut off, coinciding with the new partner helping to correct the bad behavior.

Or you could have a situation where one partner is the scapegoat for all debts that they are planning to not pay, while the other will keep a clean track record; when this is the case, the bad behavior is ongoing and will have more recent derogatories appearing - because they still want some expensive things that they really can't afford.

And there is one other possibility that I will point out. The person who is the good debtor will get dragged down by the bad debtor / deadbeat; when this is the case, the good person's credit report will have older years showing no derogatories but the occasional ding in more recent times, showing a gradual decline that can start to accelerate as more time passes.

As a few other posts have noted, finding out their past history of paying rent is your best indicator; if they had trouble paying rent to past landlords, it can be expected to happen again.

Lastly, I would add that you have to have a good understanding of debt to income (DTI) and how to calculate DTI and what a bad figure for DTI would be. And you have to include the rent as part of the debt when making the calculation.

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