Quote from @Andrea Fernandes:

Really well put, both of you. The "wait and see" trap is interesting because it's rarely a knowledge problem — most owners know a 30-day vacancy costs more than a slightly-below-perfect tenant. It's a process problem. When approval criteria live in someone's head instead of a documented system, every decision becomes emotional and re-litigated in the moment, especially under financial pressure like Eric mentioned.

I've seen the same pattern on the automation side — owners/PMs who pre-define their screening thresholds (income ratio, credit floor, rental history weight) and route applications through a consistent workflow almost never have this problem, because there's no moment where "maybe I should wait" even enters the decision. The system already decided. It's the ones running screening ad hoc, applicant by applicant, who end up overriding their own judgment when the mortgage payment is looming.

Curious — for PMs managing this at scale, is the bigger lever tightening the criteria upfront, or speeding up how fast a qualified applicant gets an answer once they apply?

 Quick results are important, and I always made a decision within 1 business day of receiving a complete application package, pulling Equifax and Court records directly in addition to actual documents provided by applicants. 

What I found more important over the years, was that more, but very selective, criteria provided consistently better results. Rather than say, a credit/rentability score, a felony conviction, an individual income number, and an eviction record, I broke it down to a more granular level. Some of the factors caught in a wider net, are not particularly relevant to the ability and willingness of a prospect to pay rent, and pay on time; or to adhere to other rules and norms we want or expect from tenants. You can very easily reject actual Good prospects if you blindly accept a very few definitive criteria. 

Income- total of all adult occupants, must exceed 2.5 times rent. (All adults required to sign all rental agreements). 
In general, looking at entire history available, for critical elements within most recent 18 months to 5 years depending on specific type of issue.
Income stability by one or more applicants, depending on ratio of their contribution. Significant savings ($5 - 10 K or more, depending on rental tier) can offset stability issues.
Verification of all income, savings.

Employment- verification of tenure and current pay, stability over X months/years. 

Housing- gaps or frequent moves, must check every document provided for additional addresses to get a clear picture to ensure everything makes sense. Often recent paystubs will have a mailing address different from the reported "current" address. Why?

Civil, Traffic, State or District records. These indicate patterns of rule violations, some much worse than others. Local laws may limit how you consider some records. However, you want tenants that follow rules, right? One or two traffic infractions is one thing, multiple traffic, plus misdemeanors, a brief (or not so brief) incarceration, plus a DUI, shows a much different pattern. Sex Offenders can be looked up in some locales, important to know local law regarding use. Bad Habits is what you are looking for...repeated actions...patterns. How much repetition is acceptable to you? Depends on a lot of factors...quality of the property, quality of the tenant pool, your idea of good vs. bad habits. 

Credit reports- these are actually required to indicate the four major factors that resulted in the score. These may, or may not, be particularly applicable for determining ability to pay rent. You must look at the number of accounts, their high credit and current balance for each of those accounts, as well as number and timing of late payments. The type of account is important. IMHO, medical, foreclosure, mortgages, and limited issues resulting from documented divorce or death rarely have a bearing on whether or not someone will pay rent. More important are "Consumer" accounts, for specific retailers, or local small businesses, and credit card accounts are most important, along with auto loans. High balances in relation to high credit for each account is extremely important. These accounts typically state the monthly payment amount MINIMUM. Each of these reduces available income to pay rent, so you must total these for a better picture, but if the ratios are high on multiple accounts, it is likely they are living beyond their means, or had a fairly recent major event such as job loss etc. and are "living" off of their credit. Even IF they are just big spenders, you are looking for Bad Habits, and high balances are that. "Charge offs" and "Account Closed by Creditor" are always bad, and are serious factors as well. Same as above, what do you consider good vs. bad habits that are relevant to their ability and willingness to pay rent?

Collections- Utility and cellphone are common, and it frequently happens when someone has relocated that they miss their "final" payment. I consider the number of, and total amount of collections as a key factor. Also, aging of the collections is important. If there is a large, but older item, they could get hit with a garnish if they are suddenly "found" by the reporting agency. For that reason I limit to a low total amount, and a small number of items.

Social Security Numbers- Some reports indicate where and when a SS# was established, which should correspond to some particular event, or, in some cases, it may state the number is of a deceased individual, or other info. Questions need to be asked and verified with documentation. Wit Sec is one possibility. Fraud is another. Becoming a new Citizen is another.

Some reports include AKA- "Also Known As" names, good to know when searching social media and for general info. Again, local law may restrict using the info.

Social media, Google searches, etc. can all reveal interesting information that indicates the kind of person you are researching. Some good, some bad. Also search on recent addresses or if someone says they had to move due to fire or ANY other reason. Particularly fires, but this applies to other "incidents" as well, I, for one, do not want to rent to someone when the news story states fire was started by food left on the stove, for example. There are a lot of protected classes in some locales, but to my knowledge, jerks are NOT one of them. If they are foolish enough to post Bad Behavior online, that can absolutely be a factor in your decision, as long as it is only about their behavior. Save the webpage/post in it's entirety as part of your completed application package for evidence if needed in the future.

After all of that, you need to step back, and look at the whole puzzle, to make sure all of the various pieces fit their story, and all of your questions are answered. Then you can tally up the hits and misses to determine approve/deny. And don't forget to send the "Adverse Action" letter for every denial.