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I have always wondered why LLs need to know about your credit rating (or use it to determine who's a good candidate). I'm pretty sure even people with the worst credit ratings doesn't translate to "bad tenant" or a tenant who isn't going to pay their rent. People pay their rent first and foremost - and mess their credit up with the money left over. People - as far as I know - do not use credit to pay rent; I don't know any landlords who even accept credit for rent - so why is that such a big factor in determining applicants? If it's really just a "check" or a filter and not realistically a way to ferret out a bad renter (wouldn't a rental history do that better?) - isn't that an unnecessary and invasive step? I don't get it - my credit isn't all that hot, but I have been a good renter for decades. I would think my record as a renter would be more important to a landlord than whether I missed a payment on a Macy bill...
I'm pretty sure even people with the worst credit ratings doesn't translate to "bad tenant" or a tenant who isn't going to pay their rent. People pay their rent first and foremost - and mess their credit up with the money left over.
You'd expect that, but there are many who know that landlords cannot legally lock people out one day after they're late on the rent. They expect to catch up, so they pay the car note, phone bill first (because these will be reposessed/cut off as soon as the service provider decides to make the call).
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People - as far as I know - do not use credit to pay rent; I don't know any landlords who even accept credit for rent - so why is that such a big factor in determining applicants?
Uhhh you're responsible for the space being rented as well as the completion of the lease. One may not be using credit cards to pay the rent but you are still contractually obligated by the above.
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I would think my record as a renter would be more important to a landlord than whether I missed a payment on a Macy bill...
Who would you rather rent to. Someone who has never, ever been late in payments with over 10 years of various trade lines all current and 100% paid?
Or should a landlord take a tenant who, for whatever reason, is lackadaisical in the execution of their financial affairs and has a few 60+ days late, a utility collection, rent judgements etc.
Most landlords aren't looking for A++ credit w/ 800 scores, but i wager many people are really unaware of whats going on with their credit reports and claim they have "good credit" when it's really in the toilet. One late won't kill you.
with little to go on to determine the charachter of a prospective tenant a background check and credit check are all a landlord has to judge you on.
while it may not guarantee negative issues down the road happening i would sooner take my chances on someone who is demonstrating good financial responsibility than someone who already demonstrated they can not control their own financial situation very well.
since their financial issues become my financial issues here is your answer.
Foreclosures and short sales are not so bad...many people have them nowadays and it is no reason to deny them as a tenant.
For us utility collections and phone providers are the big red flags.
It shows the mind set of a tenant and the easy way they have to stop paying certain important bills. Including the time frames of the unpaid bills.
It also will show if that tenant will be able to set up utilities easily or not and if it is with the specific utility company of the subject rental it may cause the tenant to pay off the collection first as well as a huge deposit to get the utilities turned into their name and we charge a higher security deposit to tenants who have certain items on their credit since they show to be a higher risk.
We are not interested in credit scores unless a tenant wants to avoid to pay towards last month rent which means they need to have a score higher than 720.
Overall people with higher scores will not do anything to damage them, while tenants with hardly any scoe don' care to walk away without paying and are considered a high risk tenant.
The only way to get bad credit is to not pay your bills. I have no reason to accept a tenant who has a habit of never paying their bills. There is no reason for me to think that he doesn't pay anyone else, but he will always pay me.
One month late one time on the Macy's bill won't hurt your credit all that badly. It won't stop you from obtaining a rental. However, that is not what I am seeing on applicant's credit reports.
What I see is 9 bills that are 6 months late. I see money borrowed and never paid back. I see lots of utilities unpaid. I see past due accounts that have gone into collections. I see court ordered judgments.
Sorry, but a person who orders goods or services and never pays is nothing but a thief. I have enough problems with tenants who are basically decent people. I don't need to put a thief into my houses.
The best predictor of future behavior is past behavior. If a tenant has always been a deadbeat in the past, he will more than likely carry on and still be a deadbeat in the future.
No thanks, I'll pass. I have applicants with better credit applying and I will accept them.
Incidentally, the applicants with horrible credit usually have enough income to pay their bills if they manage their budget carefully. So, they are using their money for something else besides keeping their bills paid.
The last girl I rented to literally trashed my condo (left the bathroom dirty, didn't clean anything up, garbage bags and boxes of her abandoned stuff, broken closet mirror etc), destroyed the entire carpet with dog urine from the dog she wasn't supposed to have, left me with hundreds of dollars of bills, noise complaints, and skipped out of the country. She had perfect credit. So while I understand why it's used, I also agree that it doesn't necessarily reflect character... sometimes at all!
Most of my tenants have pretty marginal credit but they all have excellent Landlord refs and no evictions. One has a felony from several years back for having pot. I put most of my weight in decisions to rent based on income, job stability and rent history. I have great tenants and everyone pays.
What it means is, "Do you pay your bills on time"? One major ding because of a foreclosure or medical crisis is understandable. A long history of never paying anything on time, defaulting on student loans (when a forbearance is easy to obtain), $1000-2000 cell phone bills that are in collections, unpaid child support to the tune of $10,000 reveals a character that we choose not to have as our tenants.
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