When to Decline a Tenancy Application

A rental owner’s dream is to have all his property occupied by tenants. This scenario means regular influx of income from rent, and the camaraderie that tenants develop will make them need to stay longer in that area. However, it is also a landlord’s nightmare to have tenants that give them a difficult time in collecting rent and paying for damages. This is the reason why landlords require a credit check to protect their investment from losses incurred from bad tenants. Here are some signs that a renter might not be able to sustain paying rent in the long run.

Sizeable Unpaid Bills

If a credit score indicates a considerable amount of currently unpaid bills, then it is not wise to hand the lease contract to that applicant. With today’s credit system getting more and more lenient and flexible to the paying capability of a person, then the only reason why a person would accumulate such large amount of unpaid bill is irresponsibility. A person who is financially responsible would never cause a bill to remain unpaid on a long period of time.

Bankruptcy over the Last Ten Years

It is very obvious that as a landowner, it is difficult to hand over the lease contract form to a person that is currently bankrupt. However, a credit rating that reflects bankruptcy during the last ten years can be a sign of a person’s income instability. But there are chances that bankruptcy has been caused by a business failure, the recession, or other valid reasons that nullify the chance that a person cannot handle his money very well. A person who went bankrupt due to debts should be dealt with very meticulously even with claims that he is now financially stable and responsible.

A Poor Debt to Income Ratio

When a person spends for what he cannot pay, that is irresponsibility. A credit rating report can expose a person’s debt to income ration in a quantified presentation. Analyzing the data in the report will show a person’s discipline when it comes to priorities and payment of dues.

Reading through an applicant’s credit rating report can provide detailed information on his capacity to pay. It is imperative to have a good agency to render a credit check among other background checks to make sure that a prospective tenant is qualified for a slot on the rental property.

To know more about  Credit Check click here