Using a tiered deposit system based on credit score can be risky legally if it's not applied uniformly.

In August 2024, I sent him an email outlining a new rental rate for a 12-month term and requested that if he wants to renew that he pay an increased security deposit along with the September 2024 rent.

You're being encouraged to finance people's earnest money deposits.

I also don’t charge extra pet deposits or pet rents and this makes my rentals super desirable to people.  

I am working with a bank to get a loan approved based on the $650K market value (post improvements), which will be confirmed by an appraisal.The builder agreed to let me work on the house as long as wire him a deposit (which I did).

You want your deposit back?

What you do if you move forward is not a new lease but estopel agreement they sign, your lawyer would prepare that should include the terms of the agreement that it is month to month, the amount, any deposits, any appliances etc owned /not owned by tenant and and special terms ( for instance how do you know only 2 vehicles are allowed).

@David Chiu a couple of other points:1) Security Deposit: What does the lease state about Security Deposits? 

You could use the security deposit to cover May rent if there is no damage; otherwise, deduct the damage, then apply the remainder to May rent and inform your tenant they owe the remainder.

take double deposit or more if you can and a top of market rental rate.