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Agree, an excellent past rental history should certainly be a determining factor with a poor credit history.
There are prospects with good credit history, pay there creditors on time, with consistant late payment rental history.
The application process includes references, background check, previous landlord, income as well as credit. I have to say that in my several years of experience, credit history and income have been the Number One indicators of good tenants. There's a reason banks also use the same criteria.
At any rate, I have been getting "unqualified" tenants. In addition to not just bad, but HORRIFIC credit, now I think about it all of them were either living with friends or relatives as well, so I couldn't even get a valid "landlord" reference. The applicants for this place have been "exceptional."
I'll see what happens after making the changes. Hopefully the higher price will attract a more qualified person... A couple of the other suggestions have given me interesting ideas, too.
If you willingly co-signed for his loans, I can't say much. But if he fraudulently signed your name to obtain credit, then you need to contact the credit reporting agencies and get a lawyer.
As you know, bad credit can affect your ability to get a job, a car and yes a home. Rented or otherwise.
If you did in fact cosign for the "ex", I guess you've learned a lesson. Cosigning means that you agree to pay back the money you borrowed JOINTLY.
I know one person who reminds me of your post. I believed her for YEARS that her husband had "ruined" her credit. Then I found that she had WILLINGLY cosigned for her husband's cards, used the items bought with those cards, and didn't make sure that the bills were paid on time. Co-signing means that she was responsible for the loans. I thought everyone knew that. IMO he didn't ruin her credit, she ruined it herself by repeatedly making bad decisions.
BTW, how much your neighbors drink, what their kids are like etc sound like their private business. Instead of criticizing, it might be useful to try to get your own credit straightened out. Again, I'm sorry if the Ex defrauded you, but you can repair incorrect items on your credit report. Get a lawyer if you can, but you can definitely contact all three agencies and dispute the false information on the report. You are also entitled to free copies of your credit report every year, so that you can identify those items yourself.
you need much money to get a lawyer and no i did not cosign any loans but in a marriage your spouses debts become yours and my credit rating cannot be changed for seven years fyi----as to my neighbor her behavior implies a character problem and that should be considered as much as a credit rating--my only point here is bad credit rating DOES NOT MEAN BAD RENTER---SORRY YOU MISSED MY POINT
and what if the applicant doesn't have kids? If you've got bad credit or debt, not having kids shows a lot of responsibility and financial wisdom.
All of the people who raped and pillaged wall street over the past decade had excellent credit scores. And quite obviously they were not trustworthy. You shouldn't be relying totally on a credit score to determine who is qualified and who isn't.
-my only point here is bad credit rating DOES NOT MEAN BAD RENTER
It doesn't always.
But landlords have to make the best decision they can with the information they have. We aren't looking at credit scores, but at credit reports. If a person is way behind on loans, just had a car repossessed, has accounts in collections, has no bank account, has a debt-to-credit ratio of around 100%, and owes utility companies, why would I think they will pay me on time?
They may be charming. They may be doing their best to raise good kids. But if they can't/don't pay anyone else on time, why would I think they can/will pay me? I'm not doing them any favors by letting them rent from me when it's pretty obvious they can't afford it. They should get a cheaper place.
But landlords have to make the best decision they can with the information they have. We aren't looking at credit scores, but at credit reports. If a person is way behind on loans, just had a car repossessed, has accounts in collections, has no bank account, has a debt-to-credit ratio of around 100%, and owes utility companies, why would I think they will pay me on time?
They may be charming. They may be doing their best to raise good kids. But if they can't/don't pay anyone else on time, why would I think they can/will pay me? I'm not doing them any favors by letting them rent from me when it's pretty obvious they can't afford it. They should get a cheaper place.
You make several good points, but one of the best ones is that you say you rely on the credit report more so than the score. I think this is a very important distinction. A person's score could be somewhat low for a number of reasons, but if the report shows that the negative issues occurred years earlier and they have since gotten out of debt and/or have a good record of paying on time, IMO that should trump the low score. Maybe they had unexpected expenses, or a lost job. Maybe they have a high debt ratio due to living on credit during a period of unemployment and that has caused their score to dip. But the report shows that prior to this period they were good risks, and that they have since started to get their act back together again and are once again paying all of their creditors on time.
Do most landlords feel this way? Or do they just use the FICO?
The application process includes references, background check, previous landlord, income as well as credit. I have to say that in my several years of experience, credit history and income have been the Number One indicators of good tenants. There's a reason banks also use the same criteria.
At any rate, I have been getting "unqualified" tenants. In addition to not just bad, but HORRIFIC credit, now I think about it all of them were either living with friends or relatives as well, so I couldn't even get a valid "landlord" reference. The applicants for this place have been "exceptional."
I'll see what happens after making the changes. Hopefully the higher price will attract a more qualified person... A couple of the other suggestions have given me interesting ideas, too.
Do you automatically exclude someone from being a good renter if they have a bankruptcy on their record?
The reason I'm asking is - well - here's my situation. I'm going through a divorce. Up until November I was never late on a bill - but then it came to a point where I realized I could not afford to pay my rent, make car payments and pay all of my credit card bills, so I made the painful decision to file bankruptcy. My bankruptcy was discharged in May. I am now looking for a place on my own. I have always paid my rent on time even through all of this... and have exemplary reviews from my previous landlords (I am living with family for the time being as I get myself completely back up on my feet - and honestly - have had zero expenses so I've been able to build up my savings in anticipation of this).
So I guess I am just curious as to what you would qualify as a really bad credit report. My credit, while not stellar, was not awful up until filing. I don't have a ton of charge offs or a bunch of lates on my report (for the most part). I just have a bunch of "on times" and then one... really big black mark.
Just trying to get a handle on what I'm going to be facing out there.
If I were your potential renter and discerned that was your concern -- we would probably just offer to give you the whole 6 months (or whatever term) upfront. 6 months X $400 = just $2400.
That way it takes away the issue of recovery of the deposit at the end of the lease?
Dunno -- maybe some landlords would give a discount for all paid-in-full up-front from a tenant?
This actually depends. We have only had people want to pay in advance three times. One time was an older retired couple who wanted a discount if they paid 6 months at a time. They did and we did give them a discount. The other two were both people who had marginal credit, who wanted to pay a lump sum to offset the bad credit. One turned out to be a drug dealer, and the other one totally trashed the place during the 6 months he lived there, and then we had to evict him to get him out after the 6 months.
From those experiences, we learned that a lump sum payment does not offset other issues, and if you have bad credit but a big chunk of change, there might be a suspicious reason. So good credit + a lump sum = discount, but bad credit + a lump sum =/= overlooking the bad credit.
Quote:
Originally Posted by janetvj
You make several good points, but one of the best ones is that you say you rely on the credit report more so than the score. I think this is a very important distinction. A person's score could be somewhat low for a number of reasons, but if the report shows that the negative issues occurred years earlier and they have since gotten out of debt and/or have a good record of paying on time, IMO that should trump the low score. Maybe they had unexpected expenses, or a lost job. Maybe they have a high debt ratio due to living on credit during a period of unemployment and that has caused their score to dip. But the report shows that prior to this period they were good risks, and that they have since started to get their act back together again and are once again paying all of their creditors on time.
Do most landlords feel this way? Or do they just use the FICO?
We actually don't even look at the credit score. At all. We look at what we call "attitude toward debt". If a person generally pays their bills, they are a good credit risk. If they generally leave people hanging and let things go to collections, or if they have continuous lates on everything, they are a bad risk. We look at time frames also. If a person has been very good to pay bills but then has a foreclosure or bankruptcy, that indicates hard times, rather than attitude. If they used to have lates and have done well for the last at least 3 years, that may indicate a change in attitude (or a divorce) and counts in their favor.
Quote:
Originally Posted by monack
Do you automatically exclude someone from being a good renter if they have a bankruptcy on their record?
The reason I'm asking is - well - here's my situation. I'm going through a divorce. Up until November I was never late on a bill - but then it came to a point where I realized I could not afford to pay my rent, make car payments and pay all of my credit card bills, so I made the painful decision to file bankruptcy. My bankruptcy was discharged in May. I am now looking for a place on my own. I have always paid my rent on time even through all of this... and have exemplary reviews from my previous landlords (I am living with family for the time being as I get myself completely back up on my feet - and honestly - have had zero expenses so I've been able to build up my savings in anticipation of this).
So I guess I am just curious as to what you would qualify as a really bad credit report. My credit, while not stellar, was not awful up until filing. I don't have a ton of charge offs or a bunch of lates on my report (for the most part). I just have a bunch of "on times" and then one... really big black mark.
Just trying to get a handle on what I'm going to be facing out there.
Given what you have said here, if you could show you could afford the rent on what you make, without living paycheck to paycheck, we would likely rent to you (barring anything else, of course, like smoking or aggressive dogs).
Do you automatically exclude someone from being a good renter if they have a bankruptcy on their record?
The reason I'm asking is - well - here's my situation. I'm going through a divorce. Up until November I was never late on a bill - but then it came to a point where I realized I could not afford to pay my rent, make car payments and pay all of my credit card bills, so I made the painful decision to file bankruptcy. My bankruptcy was discharged in May. I am now looking for a place on my own. I have always paid my rent on time even through all of this... and have exemplary reviews from my previous landlords (I am living with family for the time being as I get myself completely back up on my feet - and honestly - have had zero expenses so I've been able to build up my savings in anticipation of this).
So I guess I am just curious as to what you would qualify as a really bad credit report. My credit, while not stellar, was not awful up until filing. I don't have a ton of charge offs or a bunch of lates on my report (for the most part). I just have a bunch of "on times" and then one... really big black mark.
Just trying to get a handle on what I'm going to be facing out there.
We also would rent to you if your income was enough. But if you had come to us (instead of your family) in the middle of your mess, we would have turned you down.
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