A.D. Cantelmo Property Management
Our Business is Property Management in Orange County California
Why a credit rating is not the end
all
Whenever you rent a property, the
biggest worry is that you make a bad decision and the rent does not come in.
Often, when an owner is involved in the decision making the credit report
becomes the greatest decision maker. The problem with putting so much emphasis
on a credit report, is that it can be misleading.
The credit report can tell a story,
but not always the whole story. When I
look at a report, the first thing I look for of course is for evictions and if
that is on the report, the story ends there. No property manager should put
their client in a position that can have a high percentage of trouble. An
eviction on a report tells me that the applicant has let a solvable situation
get out of control. People can turn their life around, but a property manager,
unless they specialize in hard rent situations should stay away from renting to
applicants with past evictions.
Once you get past the evictions and
that part is clean, I will always look at the credit score. If it is high, then
I know that if everything else looks good, it will be an easy sell to the
property owner. The issues come in to play, when the score is not so good. Many
property owners, especially if they have been bitten in the past, do not want
to take a chance on an applicant with a low credit score. But I say not so
fast. People can have credit problems and still be great Tenants.
I always like
to find out about the job situation. If they have been employed for a few years
that can be a big point toward the applicant. Then I look at why their credit
is bad. I don’t want to see easy money loans that have gone bad. Those tell me
the applicant may have impulse control issues. A large auto loan for someone
who has bad credit is also a red flag for me. If you have trouble paying your
bills, an expensive car is not priority.
If you have medical bills, or a foreclosure,
that can account for a low credit score and that can soften my approach. Some
people may look at a foreclosure as someone who will not pay their rent if they
let their home get foreclosed on, but I look at it as that person making an
investment and the investment went bad. Not all foreclosures are the same and
want to find out why. If the applicant can satisfy me that they just made a
mistake, I can over look it.
The one important thing when
renting to a person, who has bad credit, is you need to keep them on a short
leash. If they are slow paying the rent, you need to move quickly and let them
know it is not acceptable. Don’t let a late payment linger.
I have had great Tenants who have
had a low credit score, so I don’t make a decision to rent on a credit score
alone. I take in all the factors before I reject some who has had past
problems.
A.D. Cantelmo Property Management Specializes in Property Management in Orange County
Ca.