Renting To A Tenant With Bad Credit

Landlords seem to be running into more and more potential renters with bad credit than ever before. There is no mystery that the current financial conditions have forced many Americans into foreclosure and credit defaults.

Should a landlord judge the merit of a potential tenant just on a credit report alone? Not necessarily, there are many other factors to consider other than credit score. The most obvious thing for a landlord to investigate would be the previous payment and rental history.

A low credit score does not automatically make someone a risky tenant. A credit report may show that a low credit score is due to extenuating medical circumstances. Many landlords will overlook medical collections as long as other bills have been paid on time.

Do not throw the baby out with the bath water.

When you are doing your background check on a prospective tenant, try to contact at least two prior landlords if possible. The reality is that the more prior landlords you can contact, the more accurate a picture you will be able to put together on what type of tenant you will have. Ask the previous landlords about their payment history and also how they left the condition of the property at move out. The reality is that as a landlord your only concern is that they are paying their rent on time every month. Whether all of a persons bills are getting paid may be irrelevant in terms of rental factors for a landlord. You may also want to have the potential renter provide letters of explanation on the derogatory credit items.

If it is at all possible you may also want to see if you can inspect their current property. Many landlords will also like to take a peek inside the car of the applicant. As a general rule of thumb, how a person takes care of their car will be how they will take care of your property. If their car has trash and wrappers all over the interior so will your property once they move in.

At the end of the day it is your property and you need to feel comfortable with the person that may be renting from you. I would rather have no tenant than the wrong tenant. Trust your gut, if it does not seem right do not do it.