One tenant of a couple with poor credit, advice please?

13 Replies

Hi All, 

I was looking for some advice on a recent application I have for one side of a Duplex I have listed. I received an application from a couple (boyfriend and girlfriend) who have been living together for the last year with some room mates and are now looking to get their own space. They filled out the application on Cozy and he checks out well; ex-military, currently working while also going to school, no major blemishes (a late cell phone payment years ago is as bad as it gets). However his girlfriend is a different story and has a terrible credit history with repossession of vehicles, multiple collection's and lots of late payments etc with some as recent as a few months ago but all seem to be closed now. 

My approach had always been "If its a maybe, its a no" but I am wondering if there is a way I can protect myself with one of them being such a strong candidate. One option was me looking too have her find a guarantor for the lease with good credit.

Im leaning towards denying the application because I fear its going to get to the point where she won't pay rent if she has a history of not paying bills but the rent is 16.7% of their combined income but she makes 66% of the income as he is at school.

Anyway I was wondering what the forums perspective was and if there are any options to protect myself here or if I should just move in. I do have in my head we are starting to get into a slow period of renting with the holidays coming up.

Is the boyfriend receiving any income through the VA since he is in school? Typically, the GI Bill pays the beneficiary a housing allowance as long as they are enrolled full time. Rates are dependent upon location. Just a thought.

Originally posted by @Trenton Miller :

Is the boyfriend receiving any income through the VA since he is in school? Typically, the GI Bill pays the beneficiary a housing allowance as long as they are enrolled full time. Rates are dependent upon location. Just a thought.

Hi Trenton, He is not getting any benefits through the VA and would be paying his own rent. I have no doubt he would be a reliable tenant but I don't think he makes enough to comfortably pay the rent himself.

I have had another tenant who did receive income through the VA and it was a great experience.

Thanks

Scott

@Scott MacDonald if they were married, I'd possibly take a chance on it, but in your case, I would move on to another candidate. I would think differently if he easily met the income requirements. He doesnt meet income and she doesnt meet credit is a no go for me as an unmarried couple
Originally posted by @Caleb Heimsoth :

@Scott MacDonald

What’s her credit score? I have set criteria. I’m guessing her credit score is to low and would probably move on

Yeah his credit score is in the high 700's where her's is in the low 500's. I don't have an issue with a low score as long as there is no active collections, missed payments etc. I have seen my score slump when I have taken out some mortgages and put renovations on a CC until I can refinance so I believe a low credit score can be a good indicator of problems but doesn't always paint the picture.

Originally posted by @Jason D. :
@Scott MacDonald if they were married, I'd possibly take a chance on it, but in your case, I would move on to another candidate. I would think differently if he easily met the income requirements. He doesnt meet income and she doesnt meet credit is a no go for me as an unmarried couple

 Yes that was my thoughts exactly, I called and let him know we would not be proceeding with the application and he was super polite which made the rejection harder. He asked what would have happened if he had made an application on his own and I had to let him know his income would not have cut it.

Originally posted by @Scott MacDonald :
Originally posted by @Caleb Heimsoth:

@Scott MacDonald

What’s her credit score? I have set criteria. I’m guessing her credit score is to low and would probably move on

Yeah his credit score is in the high 700's where her's is in the low 500's. I don't have an issue with a low score as long as there is no active collections, missed payments etc. I have seen my score slump when I have taken out some mortgages and put renovations on a CC until I can refinance so I believe a low credit score can be a good indicator of problems but doesn't always paint the picture.

My cut off is 525.  If they’re below this they get rejected.  That would also be higher depending on class of rental  

@Scott MacDonald ,

With her history, is it recent, or was this like 5+ years ago?   If it happened last month, it's very different than say in 2010, when life/situations change.     I'd suggest  a month-to-month lease, and looking up the maximum late fee you can legally charge in your state, put that on the lease and also if you can allow to offer rent at a small discount if paid by the first, do that.   Good luck!

I would reject it based upon her irresponsibility in the very recent past. A delinquency just a few months ago? Irresponsible people not only pay their bills late, or not at all, but they simply do not take care of their things. Or in this case,  your things (house). Nope. Moving on...

I think you made a solid decision by passing on them. If they broke up and only one stayed in your house, you would either have someone that couldn't pay or wouldn't pay. 

Thanks All, a lot of the histor was very recent which was the main concern. She has her car repossessed in Dec 2017 which is what really got to me. Again I was just so torn by him being such a strong applicant and also having been in the military I like to respect his service and offer him a well maintained house of everything had aligned. It seems to be this house I’m getting all the crazy applications. The latest just stated he is a felon for serious assault on a civil servant this year. I’ve no problems with a felon conviction depending on the nature of the crime but violence does scare me. If they don’t pay their rent and I knock the door I have no idea what’s on the other side waiting on me. I’m sure the right tenant will come along shortly.