As you all probably know, FICO scores range from a low of 350 to a high of 850. In addition, there is a relationship between a person's FICO score and the likelihood that tenant will pay their rent by the due date. That being said, what is the lowest FICO score you will accept and not immediately DQ the applicant? In other words, if all of your applicants had FICO scores that ranged from 500 to 625, would you DQ every one of them?

The lowest score I would accept from an applicant in a "C" grade rental is 650, so long as they have a confirmed income/job and some money in the bank. Last person was a women who's boyfriend left her holding the lease and car payments in her name. She got out of her lease and sold that car. Was driving a clunker and was with her employer for 4 years.

It depends on the home itself.

Landlords find a comfort spot in housing quality and housing style along with a location so the answers will vary for everyone.

Me - I offer a challenge to everyone as Roy asked an awesome question.

With the two or three years of archived move out paperwork in hand - some even hold it longer, compare how someone moved (Early termination, non-renewal, extended, lived in the unit for 3 years, room mate break up, divorce/break up LL asked to terminate...ect) and compare that to the credit score at move in.

WOW was this an eye opener for me.

I thought I was giving some folks a second chance on select units I had - I was getting bull dozed by the snow jobs. I was worried about filling units because I was loosing money - nope. Turns out, turn over cost - especially those that happened early and often were killing me.

At this point, if you have a 520 credit score - I really don't care if you Warren Buffet as a Co-signer. IMO a 520 credit score means you are out of control and live is driving the person.

Even now, with a score below 580, I will probably not accept you in my worst rental. These Lives are too unstable = but having Warren Buffet would be a huge plus.

Excellent question

Hope this answer increases someone's cash flow like it did to me. I need to thank Jeffery though about him saying your overs cost money....that made me ask the follow up question where is the breaking point in my area.

Thanks Ray in PA for asking that awesome follow-up question to my question. Your insight into this subject matter is priceless.

Yesterday I met an applicant for my only vacancy. Just from talking to her, she had all of initial things (good job, cooperative) I look for in approving an applicant. However, later on when I looked at her credit report it was a train-wreck with a 580 credit score.

I look at the total picture, income, debt, type of debt and time on job. My FICO was 690 and I own 6 houses in Southern California with no mortgages and only credit card debt paid off every month.

I had an $89 account go to collection that took forever to remove.

It's not the score, it is what makes up that score. Is it all medical bills? (Why does a young person have so many medical bills, then?) Is it student loans? Then are they working in their field of expertise with a chance of paying it back?

Is half their paycheck going to support a huge-ass truck? Just had a young woman have to move because she and her GF broke up, this one got the giant orange truck (biggest truck I've ever seen, I'd need a stepladder to get in) and so couldn't afford her rent anymore and had to move home to Mom. (She didn't leave owing money.)

+10,000 points to WMH!

It's not the SCORE. It's what CAUSES the score.

When I graduated college, I had never had any debt except a single credit card (yes, I was a different person back then) with a $1,200 top limit on it. I had no other interactions with debt whatsoever. My credit score was 720, and I know this because when I graduated I applied for a home loan. Got it too. What the heck?!?! I was a fresh college grad without a job, a dinky little credit card, and I had a credit score better than 99% of the applicants I have today.

Stupid credit bureaus! I have to stress how dumb they are in general handing out GOOD scores.

That said....bad scores do tend to be a problem. What I have noticed is most of my applicants who fall below 550 tend to have serious problems. Multiple late pays, charge offs, etc. The ones I approve tend to be 600 or higher. I have never evicted someone with a 680 or higher.

For whatever that's worth, them's my facts.

Sid,

I look at it through 3 lenses.

1) No credit: They have a very low score (or no score) because they have no established credit record. If it's one of my lower end units I might consider depending on other factors (job, pay, attitude) with a much higher deposit.

2) Inexperienced credit: They have a low score (550-650) but it is comprised of medical bills, student loans, and maybe one big oops (like a new car) but not a defined pattern of out of control spending. I consider this one further, depending on the unit and other factors from their app.

3) Bad credit: They have a low score (550-650) but there is a repeat pattern of late payment or collections across the board. Also in this crowd is a very low score (below 550). Automatic DQ for this group.

Now I am going to drop a bomb on everyone here and this is very serious hypoethical question too.

Lets take an applicant that has a 500 FICO score, 4 bankruptcies and has a credit history of being sued multiple times for non-payment of a debt. I think most LL's here would DQ this person immediately. Now, if this rental applicant turned out to be our former president Donald Trump,...would this make difference? Would you rent to D.T. and if yes, what would be your justification?

Roy, there's no need to ask tenants anything. I know why their scores are low. I see unpaid bills. I see charge offs. I see late pays. I see legal judgments.

I don't care about the reason. I care about the events which are documented in black and white.

Why don't I care about the reason? Because It doesn't MATTER. I don't care why they don't pay. I simply want to know if they pay bills on time, as agreed. That's it. End of story. There's no need to psychoanalyze a tenant or hear their life story. I won't care what their story is if they fail to pay rent, so why should I care what their story is if they fail to pay their credit card, student loans, phone bills, etc.?

Don't make this harder than it is, my friend. Just read the credit report and use the information on the page. Then you're not playing moral judge of the universe saying what excuses are worthy and what excuses are not worthy. "Just the facts, Ma'am" as Joe Friday reminds us!

The Trump question is a bit random, but I'll play. No, I would not rent to him because he doesn't pass my criteria. I apply the same criteria to him as anyone else, even YOU my dear friend! If the person in question has a reputation for not paying bills, I do not rent to them. Period. Full stop. No more "but what abouts..."

Again, DON'T MAKE THIS TOO HARD! You're trying to drag famous personalities into this when that is utterly irrelevant. The only relevant topic is: am I going to get paid: yes or no? Based on Trump's horrible track record of stiffing contractors and bankruptcies, the answer is "doubtful". I don't care if he's worth billions: he doesn't pay his BILLS! That is THEE one and only relevant fact.

I will accept a score of 500 with larger deposit, and good rental references. Often, I find that my non-student applicants who do NOT have a history of evictions and skipping out on rent do have a low credit score.

Got a call from a guy yesterday who asked how much to move in. Well, it depends. Rent is $515/ month. Deposit can be as low as $500 and as high as $1030, depending on your credit application. “Why would it be different?” Asks the guy on the phone. We run a full credit, criminal , and eviction check on all applications. The information sets the rates.

Tryan,

I am told a divorce can drop your credit score more than 50 points. So the story behind the score does carry some value, but after you lay out the results out of a chart - life still gets in the way for folks with well below average credit scores.

Ray and Sid and others are right, it doesn't matter if they have 1M or make 1M if they don't pay their bills. Their reasons why don't matter, but what is in black and white.

Scores don't matter as much as the reason why.

Gene is right as well, and I agree.

Frank Rolfe, who is the mobile home park guru, says for mobile home park tenants, the FICO score is irrelevant, he prefers the FIGHTco score.

From Frank's website...

"But we've all learned over the years, I can still have a model resident, even who has a terrible FICO score. And that's simply because as long as you are the high point or the priority of payments of all the bills coming in, and you always get paid, what do you care if the others don't get paid? If you've ever been in a mobile home park, you see constantly bills spread out over kitchen tables and kitchen counters. And in all those bills, they're typically organized with the highest priority items being at the top left corner.

And normally in the top left corner, you'll always find the invoice for their mobile home park rent. Next is typically their car payments. They know if they don't pay that their car will be repossessed, followed by the utilities because we don't pay those utilities will be shut off. But in the bottom right corner of this giant stack of bills are the things that never get paid, such as magazine subscriptions, maybe even the Rent-A-Center payment for the big screen TV.

So what does it tell you? It tells you that as long as you're in the high end of the priority, you're going to be fine. Even if x income is not enough to pay all those bills on that table, there is always enough to pay you because people like to maintain consistent and stable housing.

Roy, I'll take you up on the bet but I don't know how we are going to settle it. I'll guess he has a near 850 score. Nothing he has is owned outright, it's in one of roughly 500 corporations. Likely in layer upon layer of corporations, trusts, and various other entities. The bankruptcies and lawsuits are against one of those corporations not him personally.

A standard credit bureau check is useless for someone who's assets and liabilities are held in corporations. It's not uncommon for high worth individuals to operate their personal affairs under a corporation. Just look at the influence peddling our current president and family did a few years ago, all under the auspice of a business entity. You won't see that on the credit report either. I also doubt that Hunters $500,000 a piece paintings are being paid to him personally, it's going into a corporation and highly protected information to protect the family name.

As for FICO scores, I'm in PM and yes 650 is minimum, but also look at time at their job, etc. But if they're missing payments, no bueno! They'll miss yours if they think they can get away with it.

I tend to rent to people with bad credit but they

are on month to month leases and rent is due by 8 PM on the first.

I do not have a set minimum.

most of my best tenants do not have decent credit

there's more to a credit score.

evictions are the rule out for me

If they have avg credit but good income longevity have good references and rent history I may in some cases bump up their security. In fact most expect that anyway.

I have a script I follow when someone asks if I can work with a low credit score.

I say,'Yes, sometimes. We run detailed credit reports that tell the real story. If your score is low due to medical debt, student loans or low credit usage, we can work with that. If your score is low due to an isolated incident such as a divorce, car accident, health issue (covid), we can work with that if there are signs your score is improving and your payments are back on track. But if your report shows a low credit score is more of your life-style, which shows up on your report as years of late payments, items in collections, unpaid debts owed, we can't work with that. That lifestyle is like a virus and it can be very contagious - it spreads easily and we don't want to get anywhere near that disease (chuckle, chuckle,..)

Strange thing about credit scores, I have never seen extremely high credit scores (well above 800) when there wasn't also very high mortgage debt load.

There seems to be a sweet spot to target for renters of somewhere between the mid-650s and high 700s.

The credit scores that I see of people with stable income, low to no debt, no mortgages, and no marks on their credit reports, and with a long credit history seem to be in the low to mid 700s. It may be as low as the high 600s if the person does not have a high amount of unused credit.