Is rental history important?

Question

If you have no rental history, do you feel confident approving a tenant if income is ok and credit is not?

John Teachout · Answer

Doesn't matter what their rental history is to me if their credit is bad, they're not going to be approved.

Sharlene Mulchandani · Answer

@Khanesia Washington I know several landlords that would accept an applicant with no rental history if they have a valid reason - such as if they were living with their parents, or owned a home. Having bad credit on the other hand can be quite a red flag.

Lauren Kormylo · Answer

I would never approve a tenant like that.  I once had a policeman apply for my rental house.  He had more than enough income to cover it, and that steady job.  But on his bank statements, I saw no rent or mortgage payment.  And he had 2 bounced checks.  I asked him what he was spending on rent now.  He said he was living with his mother for free.  I asked him how he intended to pay $1300 a month plus utilities for my house, when he was bouncing checks living for free with his mom.  He had no clue.

Your renter is giving you two red flags - no rental history (which may be a lie and he has been evicted before and doesn't want to tell you), and bad credit, which means he's cheated someone else out of money.  Keep looking for someone better.

Khanesia Washington · Answer

@Khanesia Washington

Thank you everyone for your feedback. I think credit is extremely important as well. I just run across a lot of people with credit issues and wondered

Brian Hughes · Answer

Its definitely a judgement call but depending on exactly what bad credit is  (vs. say no credit)  a co-signer or guarantor may be an option.   I have done that a few times with younger applicants (their first or second apt's usually)  who had enough income,  but didn't have much or any credit history or prior address history and in a couple of those cases it became very valuable that there was a co-signer involved.

that said,  if any lies or omissions of material fact come up in your THOROUGH background check,  yes,  deny.

Depending on your jurisdiction, it may be much harder than normal to recover from a screening mistake right now,  so extra prudence is a good idea.

Anna Sagatelova · Answer

In your criteria, how do you define "bad credit" and what is your cutoff? Is it a credit score number? Is it a certain number of delinquent accounts, or a certain TYPE of delinquent account (for example, any current delinquencies on any utility), or a certain total delinquent amount?

If this applicant has crossed your cutoff, whatever it may be, don't even look at the rest. Deny and move on.

As for rental history generally, I do think it's important and it is part of our company's criteria. However, we have ways that an applicant can make up for lack of or insufficient prior rental history (we require 5 years minimum). To qualify they still have to pass all our other criteria first, and then some. We would not approve someone with a lack of rental history who also doesn't qualify on another criteria, such as credit.

I hope this helps. Whatever you decide, be clear about it and then be consistent.

Mary M. · Answer

I think you need to define "income is good and credit is not" as for lack of rental history - is there a valid reason? (Sold house, moving out of parents house, etc)

as for evictions, those will show up on a background check

Is rental history important?

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