Credit score and misdemeanors

11 Replies

Trying to rent a unit out and still pretty new at this. I have as my baseline requirements a 600+ credit score, no evictions or criminal history. I have a couple who wants to rent and both of them have 550 as score and they say misdemeanors from 2011. They have a child that was born around then and if what they are telling me is true, maybe they got their acts together then. But the 550 credit score concerns me. They both have decent jobs. This is all what they are telling me up front. I will still check everything with credit and background checks if I decide to move forward. What would you do?

Would love to have some expert advice here.  Many thanks! 

How long have you been advertising the unit for rent? It's always best to wait for a qualified tenant. Not sure what type of area the rental is in, but if it's lower class, you may be forced to lower your requirements. If it's middle/upper class, then you shouldn't have a problem finding someone with a better score and no criminal record, as long as you are priced right. It can definitely be stressful when you have a vacant unit and a mortgage to pay, but it'll be more stressful and expensive to evict a bad tenant. Good luck!

@Chris Szepessy   we have been advertising it for a month. There has been a lot of interest, but as soon as I say 600+ credit score, 3X the monthly rent in monthly household income and no pets, I lose them. The no pets has been the biggest issues. 

The area is working class salt box and small craftsman and ranch homes.  It had gotten pretty run down about 20 years ago. But it’s been undergoing revitalization in the last 5 or more years with all the growth in Nashville. So now you will find some run down houses in the neighborhood, but a lot of fixed up cute ones as well. 

I’m thinking if I’m going to compromise on anything it may have to be the pets. We have refinished hardwoods. Hate to see those get scratched up. Just need to make sure the lease ensures if they do that it is covered with the deposit. I’ve seen what dog nails that don’t get cut can do to floors. 

With a score requirement of 600 I will assume this is a C/D class property. In that type of area you either hold out for the right applicant or screen without setting a minimum credit score requirement. Any applicant with a 550 score is never going to improve. They will barley make ends meet and you can expect to be carrying them when their bills come due. You will always be the last to be paid. Insurance wise you must contact their previous landlord (not their present landlord) and find out what their situation was. Make sure you visit their present unit and inspect the condition before you rent to anyone. Regrettably most landlords are not willing to help or protect other landlords so your task is made difficult. Bottom line, C/D class properties you may simply be forced to flip a coin and take a chance.  

Pet damage, if any, will never be covered by a fee, you need to charge a higher monthly rent.

@Laurie Chimento I would call several local PMs in your area and just ask what their requirements are. Typically what you’re saying so far for the credit score and income requirements are normal.

It’s the no pets thing that can be a bigger deal. If they have a pet charge a hefty (2-400 dollars per pet) non refundable fee. Typically they’ll pay that no issue.

Instead of just having what the credit score is be your cut off I would suggest lowering it so say 525-550 minimum and seeing what causes the Low score.

I’ve got tenants with scores around that and they’re fine. Really just depends on the area and unless we live near you we wouldn’t know if it’s an okay area or not. Where I invest in B areas you can still have people with 525 or close to it credit scores.

@Laurie Chimento ,

Sounds like a C+- area,   and that's our target tenant.    I would suggest, instead of looking at the number-- analyze  the report-- do they have 1 card for $500, and it's maxed out.. or are they always late on payments?    Do they have medical bills?   Why is the score low?     If it's recent late payments, that's my biggest red flag, as it shows they cant' manage their money.   Talk to the prior landlord, and get a feel of how they were as tenants. 

If they are great with everything else-- but the credit score, I'd suggest upping the late fee up to your state's maximum allowance, and stress to them how expensive the late fee is, and how to avoid it.   

I’ve seen people comment on FB posts about apartments for rent “complaining” that the LL wants a credit score of 650 or whatever and the reason their (prospective tenant) score is so low is because they always pay their rent first and let the bills that aren’t as important go. Not always the case, but even if it was true, it does show a lack of responsibility of money/spending. Like already mentioned, look to see why the score is low. If it’s medical bills, I’d look past it. Recent late payments on utility bills or credit cards, etc I would not.

As for pets, the smaller the pet the less damage it will do with its nails on a hardwood floor. On the flip side, small dogs tend to not be able to hold their bladder as long and a lot of people with small dogs “train” them to use pee pads. The problem with that is that there’s a very good chance the dog will miss the pad at least some of the time. Charge the pet deposit or increase the rent, but also meet with the dog beforehand to see how it behaves and whatnot.

If it’s been a month and a credit score of 600 is a problem, then your requirements are too stringent for the area. Also, what about misdemeanors? My requirements are no felonies.
550 credit, no felonies or evictions, and 3 times income to rent isn’t much off than your current requirements.
I also don’t allow pets, which lowers number of prospective tenants. But an extra $25 a month rent and $200-300 pet fee isn’t anything when compared to new carpet/flooring, kilz to get rid of urine smell, new grass and landscaping, complaints about dogs, etc. I’ll never allow pets.

I don't even consider credit scores. First off with the recent economic crash many good people have bad credit scores, secondly they could be from medical issues not housing issues. I look at their outstanding debts to see if any are housing related but never consider the score as a deciding factor.

Originally posted by @Thomas S. :

With a score requirement of 600 I will assume this is a C/D class property. In that type of area you either hold out for the right applicant or screen without setting a minimum credit score requirement. Any applicant with a 550 score is never going to improve. They will barley make ends meet and you can expect to be carrying them when their bills come due. You will always be the last to be paid. Insurance wise you must contact their previous landlord (not their present landlord) and find out what their situation was. Make sure you visit their present unit and inspect the condition before you rent to anyone. Regrettably most landlords are not willing to help or protect other landlords so your task is made difficult. Bottom line, C/D class properties you may simply be forced to flip a coin and take a chance.  

Pet damage, if any, will never be covered by a fee, you need to charge a higher monthly rent.

I HAD A 515 CREDIT SCORE ONCE. EVERYONE CAN BECOME BETTER! DON'T BE A HATER THOMAS

OP - I would take some time to learn credit reporting a bit better. credit scores are a really lousy way to evaluate how a person manages their finances. understanding a score and putting a story to it will help tremendously because as Thomas has said, with the type of property you own you may have to concede (as you've already noticed). maybe it's on pets, maybe it's on credit report, maybe a bit of both.

I'll say this, if you don't feel confident about a tenant, you're probably right. don't put someone you know will be a headache in that building.