Check the credit or not?

Are people here still doing the credit check? Most of the people looking at my rental house say they have bad credit.

I’ve been looking at other ads online, and I see that a lot of landlords aren’t doing a credit check anymore. And some of those rentals are nicer and more more expensive than mine.

As I understand it, a law passed a couple of years ago severely limits what you can see on a credit check, unless you jump through a lot of hoops. I believe only the paid screening service can see that information now, and give you a generic score they come up with based on the totality of rent, eviction, credit info they come up with for the applicant.

Would dumping the credit check and just concentrating on rental history, income, eviction and criminal be a good idea, or a big mistake?

I still look at credit. I screen looking at income ( I ask for the last 2 paychecks to verify), I look at court records to see if they have been evicted or sued their landlords, and criminal records looking for drug or violent convections or any kind of financial fraud (usually bad checks).

I look at the credit looking for 90 past due mostly. They all have cable companies and cell phone companies after them. You also want to know how”hard” they are. If they can stare down a big company like GMAC, then how am I going to get them to pay a little guy like me? I also don’t want a repo man yanking my garage door off looking for some truck my new tenant is trying to hide there.

The “hoops” that you need to jump through to get a credit report amount to a site visit to your place of business (your home). They look for a door lock to the building (your home front door) and a door lock on the office. They want a locking file cabinet and a shredder.

Bluemoon, thanks for the response.
The main problem I am having is that a large number of people who come to see the house just loose interest once I tell them I check the credit. I’ve been advertising 2 weeks now and haven’t had one person actually fill out the application form. I didn’t know if I was being too strict about requiring a credit check.

I have had the same thing lately. I tell my wife when I get home that they must have been an ax murder because they would not give me an application. I would rather have no tenant in than a bad tenant in. That is because you can’t get a good tenant in while the bad one is sitting in your house. I call that the first screen. If they won’t give me an application they have just failed the first test. I do make sure I tell them that I know their credit is not perfect and I am not looking for perfect, just looking for problems. I say We are going to have a relationship. It is a financial relationship so I need to know what kind of shape they are in.

I also make sure I only show my empty houses at 7:00pm Wednesdays and 2:00pm Saturdays. That way I have 2 or 3 people there at the same time to generate some urgency. It also saves my time going over there for some guy that won’t even give me an application.

I’m sorry to hear your going through the same problem, but I’m glad I’m not the only one. I was beginning to think I was doing something terribly wrong.

I explain to them that I can work with them on certain credit issues, like foreclosure, but I still need to do a credit check. But then they still hem and haw and refuse to pay the app fee ($25) because they feel they’ll be rejected anyway.

My feeling is still that if they can’t pay an app fee, they must not be that financially stable. However, at the same time I realize that times are tough for most people right now.

I’ve had multiple sect. 8 approved applicants give me an application fee even during these tough times. We decided not to do a credit check. I did check into it. I didn’t want to trust a company to come up with a credit “decision” based on what they found on the credit check, but wouldn’t let me see. I could have gone with the full inspection so we could pull credit, but we just figured that most of our low income applicants would have horrible credit anyway. I still do background checks with the county Sheriff’s office. I also call the courthouse and see if they’ve been evicted before. We also verify income if sect 8 isn’t footing the whole bill.
If people are serious, they will come up with the money for the app fee and also a deposit. I had one lady call about one of our current vacant houses. When she went by there, she saw it was only a few blocks from her mom’s house. She was supposedly SOOOO excited and wanted an application. Guess when I got her app? Never did.
I NEVER trust anyone until I have money in hand - period.
Like Bluemoon said, you can create a sense of urgency by having multiple people show at the same time. When we closed on one of our houses, I went directly over there and showed it “as is.” I had about 4-6 weeks worth of work to do, but with the zoo of people there I was able to get a commitment and deposit that night.

Thanks Justin. Nice to see you again,I took a break from this forum for awhile.

I’m leaning towards just dropping the credit check. I don’t want to drop the rent amount again if I don’t have to. I’m going to use NTN Online for the the screening on this house, but as you stated, you can’t really see the information anymore due to the new laws and need to trust the screening company to make the credit decisions now, unless you go through the inspection. I don’t know how useful that information’s really going to be. I wouldn’t say my rental is low income, but it’s only one step up from that, and most of the people seem to have credit problems.

If I had to do it over I would have started showing the house earlier. I waited almost 3 weeks until all the rehab was done to start advertising it. I guess I naively thought it would get rented fast. I had no idea how many flakes there are out there right now and how many I would have to weed through.

This is just my gut reaction, but I’m a lot more suspicious of someone who balks at the security deposit and wants me to cut special deals for them than I am of someone who admits to a having had a foreclosure, etc.

Nice to see you back here.
We just simply haven’t had to advertise because we’ve had word of mouth from some happy tenants as well as being on the sect 8 list. We get calls pretty regularly asking if we have anything available.
I really like waiting until things are closer to being done before I show the houses because most people just won’t be able to picture things different than what they see (holes in walls, chipping paint, bad tile, etc), but most of the people we’re finding now are desperate to get out of apartments or trailers OR when the people get their housing voucher they only have about 60 days to find something.
I’ve read plenty on here and other places on line about people having to lower rent to try to fill their vacancies. We price our houses pretty competitively and are yet to have an applicant balk at the rent amount or try to negotiate us down.

It sounds like you have a good system. I went ahead and dropped the credit check requirement from my ad so we’ll see what happens.