I was looking for some advice on a potential applicant I have for a property I am renting. I have received an application from two room mates and while one of them was clear the other has multiple collections open. He was open and honest and said that he had bad credit but I was shocked when the application came through and he has $40k in collections as recent as March 2018. He has advised his mum is willing to go guarantor and claims she has a 800+ score and would be happy to go as the guarantor but lives in Maryland (I am in Texas).
My questions are:
1. What considerations do I need to take into account here? I understand they have a bad history but if his mum is going guarantor with such a good credit score should that give me the comfort I would expect?
2. Will I face any difficulties with the mum being in a different state? If I have to chase them for the money do I log my request at my local court or their local court?
3. Is there any way to find the reasons for the original debt? I had the credit report run through cozy and it gives me the following info:
Contract Callers Inc
ACCOUNT SERIOUSLY PAST DUE DATE / ACCOUNT ASSIGNED TO ATTORNEY, COLLECTION AGENCY, OR CREDIT GRANTOR'S INTERNAL COLLECTION DEPARTMENT
But it does not give me any info on the cause and what the original debt is for. I may look differently for example if this was owed to an old landlord. Is there any way to obtain more information?
I would not accept them. Roommate situations can be tough enough for a landlord as it is so adding a bad tenant on top of that is not a good idea. If you are having problems getting it rented or your gut is telling you he is legit or you really want to rent to them for some other reason just get a big extra deposit. Like first and last and double the security deposit. Demand they set up ACH or some other automatic billing and that only one payment is made (don't let them try and pay their share separately). 40k is a lot. Are you sure it isn't medical? Contract callers sounds like a collection company that the debt was sold to. There should be previous accounts on his report that went bad and then were "charged off" which could tell you what some of it was. I have never used the cozy credit check so I am not sure about how it works.