Credit Score Isn't the Whole Story: The Screening Checks That Actually Matter

It's not often this old dog can learn a new trick, but I had to look up what OFAC was. I never heard of it in the context of residential tenant screening before. Very interesting.

Beyond that, I have not used a credit "score" (or any other "rentability" score) as a criteria for screening. For most of my career I was pulling Equifax reports directly, and evaluated all of provided details. Number and aging of "lates", separating 30's from 60's  and 90's; number of tradelines and ratio of balance to high credit for each; number, aging, and dollar amount of active collections; type of accounts (generally ignoring medical, foreclosure, bankruptcy, student loan, aged auto repos); total monthly "consumer" payments; taking note of multiple "AKA's"; number and aging of inquiries; chargeoff amounts, type, and aging; any irregularities reported regarding SS# (year issued, originating state, "deceased", etc.); and noting prior addresses shown.

Court records for Civil, Criminal, Traffic, and Family courts were pulled directly from online State Judiciary site for locals. Type, frequency, and aging are the key elements here. Even repeat traffic offenders are a critical element to consider. If they have a history showing they can't follow even basic laws, why would they follow YOUR rules? For new residents to the state, we would attempt to get records online from their prior locales, but focused more heavily on assets, ties, employment, social media. We still checked through local courts, as often they may have lived or visited here and had interactions.

Current employment and previous employers were checked for stability and gaps, which would require further explanation. Same for housing/prior addresses. Often a payroll document would have a mailing address not included by the applicant. Or the gaps would be very long and need explanation. Sometimes that would be incarceration, so the date of release became a criteria as well. 

"Separations" and divorce are easy to miss. You cannot forget the legal relationships when you do not have a "final" decree. Marital rights are still in effect without the paperwork. Always screen, and name, every adult that will be occupying, and add "And No Others" to protect you somewhat if/when reconciliation occurs...and then blows up with the secondary party remaining in YOUR property!

There is so much to consider...I always look at each major area of a person's life seeking out the Bad Habits. Usually, Bad Habits in one area, carry over into others, and that is Very Bad!. A few minor missteps here and there, probably not a problem, particularly if they occurred more than 18 - 24 months prior, and current status is pretty solid. More recent, and frequent issues, or a long history of multiple issues, probably a losing proposition. I set multiple small criteria, that in the aggregate make a clear case for not approving, yet do allow for those that have grown older and wiser, correcting their old ways...through conscious effort or major life events, to be approved.

Even social media, if someone is offensive for all the world to see, I do not need to approve them for tenancy. There are in some states as many as 22 "protected classes", but so far, being a Jerk is not one of them. Just be sure to document your approval process, and maintain your records of approved AND denied applicants (including copy of their required Adverse Action letter) with the entire application package to defend your choices in the future if need be.