Would you lease a house to someone with bad credit?
We are reviewing a lease application from someone with a credit score in the upper 500s.
This is a young person who has had a good job a little over a year, and is making a nice income. The rent on our place is nearly triple what they are paying for their current apartment, but the income should easily afford our house.
Would you take this person on as a tenant?
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Tags: Apartment, Credit Score, Young Person
lease property | , 7 Mar 10
By banderson, March 7, 2010 @ 12:23 pm
No. Just because they can “afford it” on paper does not mean they will pay. Their credit score proves this.
We rented one of our homes to people with mid 600s and they were able to pay their rent, but they trashed our house by having random people come live there (without permission) so they could come up with the rent payment each month.
I have rented out my homes on and off for many years and it really isn’t worth it to rent to someone who cannot pay their bills. In this economy, do you really want to get stuck with that risk?
By AJ, March 9, 2010 @ 5:41 pm
a sub 600 tells me this person had to have defaulted on some loans in the past. I would be very hestiant to rent to someone like that. Unfortunately, without seeing the entire credit report, it is extremely difficult to make a final decision.
By quickrental.ca, March 9, 2010 @ 9:38 pm
No. Do not take the risk its not worth it.
By goz1111, March 12, 2010 @ 1:37 am
Really depends on the type of rental, On my upper rentals I would not even think about it, on my lower rentals the actual over all score is not so important to me; its in the details
The main thing to me when dealing with my lower units and bad credit score is their job, Under a year on the job I would be hesitate, unless some type of union job or other type, I like people who been with the same job for three years or more, at least they are some what collectable if they have a long time job
Then what is on the credit report? Outstanding collections on cell phone, utilities big no no, outstanding bills because of medical different story to me
Run criminal background check, landlord references a big one also with the lower credit scores
By Ashley S, March 15, 2010 @ 5:48 am
no, just because they can afford it on paper doesn’t mean that they can actually afford it in reality. Keep in mind you don’t know what their other bills are. Also since their credit score is not too good that means that they have either a lot of debt or are not making payments on time or paying off debts they already have,medical debt might be a different story but its best to get details. It sounds too risky to take them on at the current moment and being at a job for a little over a year isn’t all that long. Also with the economy the way it is do you really want to take the risk? Do they have renters history?Also I would recommend getting a criminal background check to make sure your not letting someone with a significant criminal history move in.
By Gertie, March 15, 2010 @ 4:08 pm
Depends how recent is the last unpaid debt. If it’s been a while and they don’t have too much outstanding recurring debt they just might be able to afford it.
By Tell Me, March 18, 2010 @ 2:05 am
PROS and CONS
Normally I would not if my standards for credit rating was out of line. But if you decide to go ahead, get substantial deposits to offset the risk. Explain to your proposed tenant that this is the only consideration you can lease to them with the credit rating they have.
By btwitkin, March 18, 2010 @ 3:00 am
Absolutely. Does he have an eviction on his report? Can you get references from previous landlords? Can he prove income?
A bad credit report DOES NOT mean he wont pay the rent. You need to look at the entire picture.
By schwildcat1977, March 20, 2010 @ 2:08 pm
It does not help to just look at the score. It would depend on what else shows on the credit report. If it is all medical and stuff like that then I would take that into consideration. If it was all credit cards and frivolous stuff then No, that is a bad risk. Also, if everything on it is old and there are no new debts, I would consider that as well.
I would also look at rental history and if they have always paid rent on time even if they did not pay everything else.
Also, We require income to be 3 times the rent to be sure they can pay.
You really have to look at the entire picture.