THE SCORE YOU WILL ACCEPT SHOULD BE BASED ON THE LOCATION AND KIND OF PROPERTY YOU OWN.
WHAT SHOULD YOUR CRITERIA BE? When you think about your ideal tenant, you immediately think of someone who pays their rent on time, respects your property and follows your rules. But how can you reject the applicants who do not meet your standards while avoiding potential legal issues and discrimination claims arising from inconsistent or biased selection processes?
You and your property managers can evaluate applicants more efficiently and make well- informed decisions without crossing the line into discriminatory practices by establishing clear and objective criteria. Consider the following common rental criteria other landlords have found useful in choosing their next tenant.
Credit Score/Credit Report: Whether you establish a minimum score or an acceptable range, an applicant’s credit score is a strong indicator of their financial history and responsibility, giving you a sense of how likely they are to pay their rent on time. The score you will accept should be based on the location and kind of property you own. For instance, you will probably require a higher minimum score for an upscale rental and accept a lower score or range for a workforce property.
What to specify
State the minimum credit score or range you will allow. If the applicant’s score is below the stated criteria, you may ask for a higher deposit or guarantor.
A bankruptcy discharge within the past 3 years will result in a denial of the application. Keep in mind that bankruptcies can stay on a credit report for up to 10 years, so choose a timeframe that aligns with your comfort level.
An unpaid collection related to the rental such as unpaid utilities or money owed to a property management company will result in denial of the application.
DENIABLE FACTORS
Credit score under your minimum requirement.
A bankruptcy charge within your stated timeframe.
An unpaid rental- related collection.
An unverifiable government-issued ID or Social Security Number (SSN). Note, in some states like California, you cannot deny an applicant if they do not have an SSN, but you can require a government-issued ID.
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