Re: FICO score of 483 - Landlord Forum thread 324518

Re: FICO score of 483 by Anonymous on September 16, 2014 @12:51

I have two SFH houses in a low income area. Not ghetto, but pay here in Idaho is pretty low, but so is the cost of living. People who have great credit can buy homes here. When a house costs on average $200,000 (or less if you are willing to drive 25 min out of the city center), well qualified people buy.

That being said I have to deal with less than desirable credit. After buying my investment homes I realize I may have gone too far out of town (again, if you go 25 min out of city center a person with good credit can buy a house with a USDA loan and zero down) so the applicants I get never have great credit. I have to work with 550-650 most of the time. I look at WHY it's so low. The few times I've seen a score below 500 its been absolutely horrible- outstanding debt to cell companies, cable companies, furniture companies, credit cards etc... things you shouldn't need to finance in the first place if you're living paycheck to paycheck. One even had an outstanding debt of $3000 to apartment community here in the area. She either did a lot of damage to her apartment or went a LONNNNGGG time not paying rent at her subsidized housing! But of course... she had a huge dog. I asked her to bring her dog to the home when I showed it and it peed all over the patio. This was before I saw her credit... YIKES.

I also look at whether or not they have a prepaid phone. If no cell company shows up after doing a credit report, they most likely don't have a regular one. They would have a landline or a prepaid cell if they gave you a phone number. A prepaid is a red flag to me, along with not having a checking account. Even people with credit in the 500s usually have a regular cell phone and checking account. What kind of terrible credit do you have if you can't get either one of those?

Personally, I would pass. Speaking from experience in a low income area, I do NOT take section 8 (pretty much guaranteed to be a deadbeat) but I WILL work with tenants who can at LEAST maintain a bank account. Not all of us can get applicants with over 700 scores, and sometimes the only option is to work with what we've got.

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Re: FICO score of 483 by Anonymous on September 16, 2014 @12:53	[ Reply ]

One thing I forgot- what is your recourse with them if they don't pay? What can you possibly do, put a bad mark on their credit? At 483, it can't get much worse. Bottom line- you have a lot more to lose than they do.