How much do you analyze credit report information

Question

How do you feel about this hypothetical info?  I'm used to a better applicant but this seems to be the norm in this new area I'm invested in.

Applicant has a higher credit score above 720 but has 15+ 30 day late mortgage payments over 10 years (four in the last two years).  75% balance on credit limit.

No rental history as a previous home owner.  Has a mortgage still that would leave very little on the table after paying rent.  Income and savings are great.

I'm a no on this but am I being too harsh?

Joe Splitrock · Answer

Overall that is an excellent credit score. Why is she keeping the house and renting? Managing a house and rental payment could be hard so that is the big negative I see. If she is renting the house, then it could be an income stream. A late payment could be as simple as a couple days. Not ideal, but the credit score indicates overall she is a good payer. Good income and good savings are strong qualifiers. I would probably rent to her if she had car payments and other recent good payment history.

Jaron Walling · Answer

75% balance of credit limit? Probably a foreclosed on property and no rental history? Hard pass.

A good credit score is the least of my concern. Verify the income and see if it's 3x rent. That's the only way they have a chance if I'm signing a rental agreement with them.

Stephen Brown · Answer

I don't use credit score as a factor. I look at their income, eviction and criminal history, and landlord references.

Scott B. · Answer

Single female.  Yeah I’m a pass.  It’s too many red flags for me.

Julie Hartman · Answer

@Scott Buoncristiani Is this guy separating or divorcing? I ask because you mention he'll still have a mortgage on top of any rent payment. If he's in the midst of splitting up with his spouse, that on top of the late payments would place him firmly in the reject pile. We've had many of these type of applicants lately and nearly all of them have flaked out in one way or another. Plus, once the dust settles, he may have child support or alimony payments on top of it all. You are not being too harsh; you have to protect your interests.

Michele Fischer · Answer

I would not be displeased with 4 late rent payments in 2 years, but this is a tough one.  They seem to be financially strapped, which might explain moving from home ownership to renting.  But that is normal for renters.  The late mortgage payments shows a lack of prioritization to housing, but they may prioritize differently with a smaller landlord versus a big corporation.  I would probably take a chance on this one, the overall credit score is good for a renter, but it depends on what other applicants you have in your area and what your criteria normally is.  Have they had the same mortgage for 10 years?  This might indicate they don't like to move and may stay awhile, but again, rentals are different, and you don't have any trend data to see how they might behave as a renter.  They should have more skills and interest in repairs/landscaping and seperating minor issues from big ones, which we find lacking a lot.

Bjorn Ahlblad · Answer

Based on that info you are not being harsh at all. The guy is too risky and will be late every month!

How much do you analyze credit report information

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