The reality though, is that many applicants can not meet every requirement. A FICO score is a good starting point for your tenant screening process.
5 Ways To Use Fico Scores As A Landlord
1. Keep İn Mind That A Fico Score Does Not Tell The Whole Story
Ideally your applicant will have a minimum score in the upper 500 to 600 range but even if they fall below these levels, they may still be good candidates.
2. Evaluate What İs Affecting Their Score As There Are Many Factors That Can İnfluence This
Be very cautious if you see judgments for delinquent rent as this is an immediate red flag.
3. Ask Your Perspective Tenant About Anything That Gives You Cause For Concern With Regards To Their Fico Score And Credit History
For instance, a foreclosure will cause a significant drop of a FICO score but before closing the door on the applicant find out the circumstances. It may not be as bad as it initially looks.
4. Weigh The Score Against All Other Known Factors Such As Employment History, Rental History And The Debt-to-income Ratio
Many people default on credit card and loan payments but still keep up on rent so this is where good rental history should definitely be considered and weigh heavily in their favor.
5. Expect To See Problems When You Pull A Credit Report And Try To Be As Fair As Possible When Evaluating Their Application
Few consumers have perfect credit and FICO scores, but they still make good tenants.
Tips & Warnings
Never be afraid to ask your prospective tenants questions. Many landlords are embarrassed or uncomfortable asking strangers personal information especially about their financial life, but you must overcome this so you have all the necessary information to make an informed decision.
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