Posted by Brian W (FL) on June 25, 2001 at 14:09:34:
591 is not a great FICO score. Try getting a loan with that score. You could get one, but you’d have to jump through a lot of hoops and have a higher interest rate.
But, I agree, sounds like a good tenant.
Should I Accept or Reject This Tenant - Posted by Frank IL
Posted by Frank IL on June 25, 2001 at 10:32:32:
Help! I’m a rookie and in process of renting my first property. I need some advice. A nice, well-spoken, clean looking tenant came to see my property yesterday and decided she wants the property. I just ran a credit report on her and her FICO score was 591. She has $58,000 in credit card debts and 10 instances on her credit report with ratings of R1 (one payment late) and R2 (two payments late). All of these are recent reportings by the credit card companies (6/01). Her prior credit to 2001 was all rated as I1 (paid on time). I’m planning on contacting her previous landlords to check on her but even if they say she paid on time and was a great tenant, should I reject her on the basis of this credit report? For the experienced investors out there, please let me know what your thoughts are on this.
Re: Should I Accept or Reject This Tenant - Posted by Dan
Posted by Dan on June 27, 2001 at 01:11:08:
I think that you shouldn’t rent to her, if she has that much debt on her credit cards she obviously doesn’t have her proirities straight. What happens if one month all of her bills leaves her with not enough money to pay the rent. Its too risky!
Re: Should I Accept or Reject This Tenant - Posted by phil fernandez
Posted by phil fernandez on June 25, 2001 at 20:43:27:
Frank,
I’d take that tenant in a heartbeat. You aren’t going to get credit scores of 700 or 800 for tenants. Heck those guys have bought houses.
You have to look at the entire situation of the potential tenant and determine their intend to pay rent. I always run credit checks and every landlord should. But don’t get fixated on a number.
Re: Should I Accept or Reject This Tenant - Posted by Jim Locker
Posted by Jim Locker on June 25, 2001 at 12:49:19:
First of all, a FICO of 591 is pretty good.
Second, R1 means “paid as agreed” - and implies payment on time consistently. It is the best rating.
You are describing the credit report of a responsible person who pays her bills. You are also describing someone who is living on the edge; if she gets laid off for more than a short time, she will be in trouble.
However, that is not your lookout; you simply CANNOT refuse people because of what MIGHT happen. Also, since it is credit card debt, if she does get into trouble, she’ll probably go Chapter 13 and work out a repayment schedule for that debt, while not involving you at all.
If she applied for one of my places, I’d accept her in a heartbeat.
Re: Should I Accept or Reject This Tenant - Posted by Dave (CA)
Posted by Dave (CA) on June 25, 2001 at 11:23:44:
Does she have a plan for paying off her debt? Can she afford to do that on her income or is she sinking deeper every month? Don’t make her problems your problems.
Re: Should I Accept or Reject This Tenant - Posted by DanT
Posted by DanT on June 25, 2001 at 11:01:44:
Frank,
Well…this is going to be a debatable area for sure. I never even check a credit report until I have made my selection and then only do so to make sure there are no hidden evictions and that the tenant can get the utilities turned on. My concern is that the previous landlord references are good and that they have never been evicted. The credit issued in my book are of little value. Lots of folks have credit issues but still need a place to live, first. And frankly if they had an 800 FICO score, why in the world would they want to rent anyway? Just my thoughts. DanT