Real Estate Agent · Slidell, LA · Member since 2017 · 207 posts · 267 votes
I have a new client that is looking to rent, but has horrible credit. He had a major medical issue, he survived (his credit, did not), and now is making decent money on track to make 120k annually.
Where do we send clients like this to find a place to live?
I am taking him on because I love to help people, but I am wondering if finding him a rental might be a bridge to far with his low credit score. Any ideas would be greatly appreciated!
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
5y
1) Bad landlords that do not screen.
2) Nice landlords that will look past his credit being destroyed due to medical bills.
3) Smart landlords that will accept him with a large security deposit / pre-paid rent / cosigner.
Most important thing is to be upfront with the landlord. If I have to pull your credit to find out that it is awful, you're not moving into my place. Tell me up front and you have a chance. I accepted a person who was in bankruptcy because they were up front about the situation and had a cosigner. Had they not told me up front, I'd have not accepted them.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
5y
1) Bad landlords that do not screen.
2) Nice landlords that will look past his credit being destroyed due to medical bills.
3) Smart landlords that will accept him with a large security deposit / pre-paid rent / cosigner.
Most important thing is to be upfront with the landlord. If I have to pull your credit to find out that it is awful, you're not moving into my place. Tell me up front and you have a chance. I accepted a person who was in bankruptcy because they were up front about the situation and had a cosigner. Had they not told me up front, I'd have not accepted them.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
5y
@Johnny Quilenderino some small LL's who do not use a PM do not screen much or at all. I don't know how you would find LL like this. Perhaps a yard sign, maybe an aging LL. Many people with poor credit rely on motels or rooming houses etc. You might also try a tenants rights group. A big deposit or cosigner can help too. Good luck!
Real Estate Investor · Hayward, CA · Member since 2015 · 134 posts · 88 votes
5y
I have rented to many tenants who have had credit issues due to medical bills, divorces, bankruptcies, etc. If you have their bank statements, I would look at the balance each day and make sure it is sufficient to pay the rent. Every one I have taken a chance on have been excellent tenants. The credit is a good guideline, but I feel that a lot of really good tenants are passed up because their FICO is not high enough. My rentals are month-to-month, so if there would be a major issue, I would just give them notice. During Covid, it is a little tough to do this tho. Your applicant sounds like someone I would take a chance on.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
5y
I rent to them all the time. If they have a good job now, no problem. You have less leverage because you are dealing with someone without a credit score to protect but many are working on cleaning them up and they are going to be with you for a while. I use honestrenter.com to try to weed out entitlement issues. Lots of good tenants have bad credit for lots of different reasons. I also do month-to-month for credit issues so if it doesn't work out in normal times it's not a problem.
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
5y
I took a chance on a single woman with 2 kids .Credit was bad , medical bills , she just went thru a divorce . She has rented my house for 24 years so far . She was late 1 time
HVAC Tech · Fort Wayne, IN · Member since 2015 · 423 posts · 223 votes
5y
@Jill F.
Honestrenter.com, very interesting. Had never heard of that. How accurate has it been for you? How do potential tenants react to u having them take this?
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
5y
I advertise that I have options for "less than perfect" credit. Usually people are just glad that an option is available. I have only denied one person due to this screening. The tenants that I rented to that took the test have all been good tenants. I have used it maybe 7 times now over the last couple years I still rent to all of them and they have all paid through the covid crisis.
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
5y
You are going to want to look for small mom and pop vs. management companies. I am personally more interested in someone's story and recent history vs. looking at their score alone. I give fair warning that I am going to be running their credit report, now is your chance to explain what I am going to find. I have forgiven bad credit due to divorce and medical. Your tenant seems to make plenty of money and that talks, offer additional deposit and maybe an last months rent to give the landlord peace of mind. It is unadvised but also many landlords lower their criteria if it is taking a while to rent the place so looking at older postings can help as well. You can also offer 25-50 extra a month for taking on the risk, not a huge deal for your client but can swing the pendulum in your favor.
Leclaire, IA · Member since 2016 · 161 posts · 130 votes
5y
@Johnny Quilenderino
I treat a medical related bad credit issue very differently than not paying credit cards, etc. Look past the score to income bs rent ratio, other bill paying record, recommendation from prior landlord.
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
5y
@Johnny Quilenderino Hi. 120K is great $, not decent $, respectively. Is he able to give the tenant the full year rent? Or 6 months? I think having some skin in the game will drastically improve his chances.
We always think that people who file for bankruptcy are sociopathic spenders who don't care who gets burned in the process, but overwhelming medical bills are one of the top reasons this happens and frankly, it could happen to many of us.
Depending upon the person's income, ask if there are specific niches that might help. For example, veteran's affairs, social services, vocational rehab and private agencies are all places that provide help in my area. They can sometimes tap into pools of money to help ensure that rent is paid if the potential renter cannot make the full payment or needs help with a more substantial deposit. If there are persistent mental health issues, there are also agencies in many areas that are interested in getting people into long-term, stable housing; one in my area has a "Bridges" program that pays for the deposit and first month's rent to secure housing.
I agree with everyone here that mom & pops usually have more relaxed requirements. I work very hard to be felon-friendly because of my work with past substance abusers. Felonies usually knock others out of the applicant pool by a management company. I also really like any screening that takes into account a person's personality traits besides just their ability to pay. And, how clean is their vehicle? That's a good indicator of how clean they are in your home.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
5y
My suggestion would be to be upfront about his credit issues. I think many LLs will accept someone like this if he has good current employment, has paystubs to back up his income and a larger deposit. Depending on where he lives there may actually be laws in place to protect people like this... (See Oregon)...
So its not hopeless. He should be able to find a decent place to live !
@Johnny Quilenderino Hi. 120K is great $, not decent $, respectively. Is he able to give the tenant the full year rent? Or 6 months? I think having some skin in the game will drastically improve his chances.
This is illegal in many areas..... and a years worth of prepaid rent is a bad idea in any case... and this guy should not need to do this.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
5y
So he may need bigger deposit, maybe 2x or 3x rent. I would make his application look golden....every line filled out, every phone number filled out, every date, every property manager, etc. How about 3 letters of recommendation from employer, clergy, military, etc. I print out rental payment history to show for the last 1-2-3 years he has paid on time every month or early. You can get that from bank statements or money order receipts. Print out his credit report to show he has paid everything but medical on time. Offer to pay 1st and last months rent. Show pictures of how clean his cars are and inside his current residence to show how well he will take care of it and keep it clean. If it is true, then show they have no pets, and have them sign a letter that says they will not have pets in the home at any time including visiting pets during their tenancy. Include copies of his last 3 paychecks with the application. No one ever submits all this stuff, but he needs to look like the model tenant if his credit is horrible.
If he doesnt want to do this, then dont waste your time. You can refer them to craigslist and Zillow, where he will need to sweet talk owners who like to hear the stories directly from the tenant.
Rental Property Investor · Chicago, IL · Member since 2017 · 293 posts · 383 votes
5y
@Johnny Quilenderino there is always landlords willing to give people another chance. You may need to call on their behalf and talk them up but I see it all the time. Some landlords in my area don’t even look at credit score! I’m not sure where he is staying now but I would tell the client to start paying off the lowest debt to improve his credit. Good luck.