Is it OK to deny this rental application?

36 Replies

Hi, I'm newer at this.  I have written minimum requirements for renting our houses that I share with prospective tenants which includes ">600 credit score.  Pattern of financial responsibility".

This couple sent me an application. They meet the income requirements and credit score. However, when I look at their credit report, it scares me as a landlord.

He makes close to $60k/year before taxes. Has almost $30k in revolving debt and is very close to credit limits and sometimes goes over them. Has about $700 in collections.  Just tried to open a bunch of new credit cards 5 months ago; those he did open are now close to credit limit.

She isn't making much money because she's studying for her bar exam in two months. She has $9000 in collections from college student apartments in 2018.

Although they meet the credit SCORE requirement, is it OK if I deny them because of these other details?  Or am I overreacting?  Rent for this home is $1990/month. 

Thanks for the advice!  

Updated 6 months ago

edited to add: significant other has additional income; therefore, they do have 3x rent in income.

The important thing is that the requirements are “minimum requirements” not “if you barely meet all the minimums you are automatically approved”. Owing $9000 in collections to a prior landlord to me is basically the same as an eviction. Definitely add a “no evictions” minimum requirement to your minimum quals if you haven’t already  

Did an eviction come up on their background check? Even if it didn’t you can’t approve someone who has a history of not paying their landlord when you are in the business of being paid as a landlord. Sometimes the thinking can be that simple. 

This is what my qualification standards says.   To me, this doesn't show a pattern of responsibility.  It's painful because I'm new at this and want to just approve them.  But then I'll always worry about them not paying. 

  • Applicant must exhibit a responsible financial life. Credit score must be a minimum of 600.

  • Applicant’s background check must exhibit a pattern of responsibility.

Follow your criteria...and your gut. You said it yourself....they don't seem responsible

Also...especially in this case. No lawyers or those employed in legal services ss those weapons are waiting to be used....against you.


NEXT!-

Originally posted by @Deborah Repaskey :

Hi, I'm newer at this.  I have written minimum requirements for renting our houses that I share with prospective tenants which includes ">600 credit score.  Pattern of financial responsibility".

This couple sent me an application.  They meet the income requirements and credit score.  However, when I look at their credit report, it scares me as a landlord.  

He makes close to $60k/year before taxes. Has almost $30k in revolving debt and is very close to credit limits and sometimes goes over them. Has about $700 in collections.  Just tried to open a bunch of new credit cards 5 months ago; those he did open are now close to credit limit.

She isn't making much money because she's studying for her bar exam in two months. She has $9000 in collections from college student apartments in 2018.

Although they meet the credit SCORE requirement, is it OK if I deny them because of these other details?  Or am I overreacting?  Rent for this home is $1990/month. 

Thanks for the advice!  

You can and should deny anyone who makes you feel uncomfortable. Your house, your rules. 

They don't meet your financial criteria.  That "pattern of financial responsibility" is not met and in this time of economic uncertainty, his job today might not be a job at all tomorrow. Studying for the Bar and passing it are two different things.  They have no fallback position other than to not pay you.   And, that's not an option.

Bolt.  You can do a whole lot better.   


 

@Deborah Repaskey . Also, you needing to post and ask tells me you are having concerns. Follow your instincts, as every time I strayed it cost me dearly! Further, the past $9000 owed to a landlord already tells you the story. You need to read what is in front of you. PASS

The $9,000 owed to a previous (and fairly recent by the way) landlord would be enough for me to deny them all by itself. Hard pass. 

Originally posted by @Deborah Repaskey :

This is what my qualification standards says.   To me, this doesn't show a pattern of responsibility.  It's painful because I'm new at this and want to just approve them.  But then I'll always worry about them not paying. 

  • Applicant must exhibit a responsible financial life. Credit score must be a minimum of 600.

  • Applicant’s background check must exhibit a pattern of responsibility.

 "Applicant must exhibit a responsible financial life." They clearly have not. I'd be a hard pass with these folks. 

Don't be afraid to deny based on legal grounds. 

Time and effort spent screening and placing is more than worth it. 

All of us that have ever had a turd holding our place hostage wish we listened to our gut. 

I like to ask questions in my ad, especially regarding how many animals they have and how much they smoke. I can often just deny because they were untruthful. Liars are not a protected class. 

@Deborah Repaskey

This is an easy no. All my properties are in D class neighborhoods and I wouldn't even approve this applicant. If they haven't paid their previous landlord, what makes you think they are going to pay you? I promise you, they will become an issue real fast. You aren't desperate for a tenant. I would rather leave my unit empty an additional month to get the right tenant that will stay for 7-10 years, rather than put ther wrong tenant in. You will end up in court having to evict them. Save yourself the headache and move on to the next application.

If it was $9,000 in collections from anywhere else (like a store credit, or car loan), it'd seem like a decent tenant application that maybe you could justify.  But $9,000 in collections in rent?  No way.  Unless you don't mind not collecting $9,000 in rent.

I'm also in the "sorry, but no" camp. This is an example of no matter how much someone makes, they can't manage money. If she passes the bar and gets an $80k a year job, their financial status will probably still look the same, just with larger numbers. Tell em no.

It's tough as a first time landlord because all you read is you'll get sued for discrimination.

But anyone you feel in your gut wouldn't be a good tenant as long as it is not based on protected classes..you're in the clear.

And likely folks like this are used to hearing no, so they have already moved on

...

Just had a minimum qualification applicant recently...was on the fence...said no.


Next day a stellar score,3x over required income applied...in!

@Jairo Zapata

-What other requirements can you name on your rental listing without getting in trouble with the law?

Minimum Fico Score required

An “X” income/rental ratio

Non smokers

No pets (except service pets)

What else?

Basically, you should have two concerns.  Getting the best tenant.  This one is not.  And then not getting a law suit for discrimination.  Credit worthiness is a legal discrimination.   You should be fine.

I often check "beyond" credit reports, for lawsuits.  Those who successfully use credit repair companies can fool us into accepting their poor credit.  Basically, I search for local lawsuits.  Lots of them don't seem to hit credit reports.

The seven classes protected under the Federal Fair Housing Act are:

  • Color.
  • Disability.
  • Familial status (i.e., having children under 18 in a household, including pregnant women)
  • National origin.
  • Race.
  • Religion.
  • Sex.