Swapna,

It really depends on the individual tenants. There are lots and lots of possibilities. I would suggest that as long as the Tenants appear to keep your house clean and pay you on time (at least and until they have their jobs), you should be okay.
Besides, One thing which all landlord should understand is that there are four types of tenants who would be looking for an individual home to rent other than the rental apartments:
Ones with pets
Ones with low credit score
Ones who wants to sign Month to Month lease
Ones who needs bigger space to rent

If they had excellent credit , they might as well rent the Rental Apartments.
Low credit score does not mean Bad Tenants. These are some risks you take when you rent.

Call me for more discussions.

Vishal Maher
Cell# 732-277-9321.

We have a tenant who had a foreclosure, and has now rented for 3 years, never once a day late. The tenant takes excellent care of the property. It's neat as a pin, and they do basic maintenance themselves.

I think you have to evaluate the total application including references, stability in job and prior residences and credit scores. If you see weaknesses across the board, be wary. If you see overall strength, consider the application. Only you can make a final decision after a comprehensive review.

FYI-The Average credit score in NJ as per is Money-Zine.com is 693.

The poster does not sound like a professional landlord. My advice stands. 700 scores are an absolute must, and are a good indicator of the tenants ability and willingness to pay their bills.

There are no stable jobs right now, everything is up in the air. Checking employment is not enough. The poster should protect herself to the best of her ability. Insisting on a 700 plus FICO is one way to do that.

I would want:

1. 700 FICO scores for everyone on the lease.
2. 3 year stable job history for everyone on the lease.
3. Satisfactory references from past landlords.

Period. Over and out.

This is business, not charity. The laws in this state already unfairly penalize landlords and favor tenants who default on their rent.

While a 700 FICO is not a guarantee, it IS A VALID INDICATOR, and the best statistic available to make an informed determination.

Swapna, do not deel bad about being tough on potential tenants. If they get in and they are not qualified, believe me, they will make it tough on you when you try to evict them in this state.

I was just thinking, instead of long or even moderate term leases, I might go with a revolving 3 month lease with options to renew cancellable by either party with 30 days written notice. Not sure if that would pass legal muster, but I'd look into it.

Amateur landlords cannot do enough to protect themselves at the moment.

-Marc

I agree with Michelle, as I previousely pointed out the high credit score does not insure they will pay you or keep your property in good conditions. References are important. Below is the pdf of New Jersey responsibilities for landlord and tenant. Please open the link and review. Hope this helps you.

http://www.state.nj.us/dca/codes/lt/pdf/t_i_r.pdf

Although Marc has some valid points- The economy has changed several homeowners have lost there homes..and obviously there credit score changes drastically...Where do they go???? Well where else, they rent! Its unfortunate to have to be in that situation but they need to live some place!

I would say make sure they have a secure job and are able to give you the 1 1/2 months security + one month advance. Once they miss one months rent file for an evictiion immediately(it should take about 2 to 3 months to get them out!) as for the 700 credit score it doesn't mean anything if they don't have a job!

Those are low scores and the advice given below is good. Something else to consider--since they are not married, what happens if the one with the credit score decides to call it quits--then you are left with the 510 score tenant to pay the rent (without the financial help of the 635 score!)
I would say be patient. You should be able to find better tenants. It is better to wait for them than to have to evict bad tenants for non paymentof rent.
By the way, if you don't already have it, get a copy of "truth in renting" Being a NJ landlord is complicated by knowing the landlord/tenant rules. The state favors the rights of the tenants in most circumstances. You can contact me via Trulia or my website, if you need a copy.

I am answering from a personal perspective.

No. Find another couple / Tenant.

If you have the credit report, see how many times and how late the bills are. Really late? then guess what.. When rent time comes.. late.. and then really late.. then frustration. But if you feel that you need to provide a serivice and just want to get it rented.. go ahead.

As Realtor, I also take rentals ( landlord pays commission ) I list them and due to my networking.. I have all kinds of people ask me to help them rent apartments and homes.. I only get my clients tenants with 700 or better and jobs. Sorry, if it sounds bad, but my client's business interests come first. I have techniques that find great tenants. And no, I am not sharing how I get my tenants.... :)

Hi Swapna,

Also, a professional landlord/investor can afford to take a risk on someone with a lower than average score. Because he has the resources to deal with a bad tenant experience should it occur.

However, on the other hand, if you are renting your only house, and you are not in the business of dealing with tenant problems on a day-to-day basis, then I would require 700 FICO scores period. It's not a difficult decision. There are plenty of tenants who have this kind of score.

I would not pay attention to anecdotal presentations of low FICO people paying on time and high FICO people trashing the property. Yes there are occasional exceptions when you are dealing with human beings. But FICO scores are the most reliable method known of assessing the odds of getting the rent on time.

By the way, a stable job history is not a great indicator of a person's payment habits. Many people who hold jobs don't pay the bills on time. A low FICO score will reveal that type of person.

Requiring a high score will not eliminate the risk. But it will minimize it. Most people with FICO's in excess of 700 CARE about their credit score and make sure they pay their bills on time.

-Marc

Good morning Swapna,

It is a difficult task making a decision on accepting a tenant or not, I agree. I have rented to tenants with excellent credit, but they were literally slobs and did not take good care of the premises and rented to people with low scores that improved the place. It is alwasy a risk. Regarding credit scores, as previously mentioned look at the report, see if they pay on time, the score could be low because of debt ratio to credit limit, there could be a short period of time they got behind due to illness or another reasonable explanation and are up to date on things now. Call and.question the last two landlords if possible, the most recent may give you a good report to get rid of them as tenants. You stated "fairly stabe" call to verify employment to see how long they are employed. Good luck!

I have rented to persons with low credit scores on serveral occaisions. I checked their references, pervious landlord and employment. Perhaps I was lucky, but I never had a problem.

Hi Swapna,

I would absolutely not rent out a house to a couple with those credit scores. 635 is not all that good to begin with. 510 is someone who habitually fails to pay their bills.

Credit scores are very reliable indicators of ability and propensity to pay bills on time. I wouldn't try to look past them or into them or try to justify them. They are what they are.

I would want a minimum of 700 for both parties before I would rent out a house to them. You only get to make this decision once. You don't want to blow it.

-Marc

Marc Paolella
Relocation Director
Member, Worldwide ERC
Licensed Realtor NJ
Licensed Appraiser NJ & NY
Century 21 Joe Tekula Realtors
Agent of the Year 2008
Owner: Sands Appraisal Service, Inc.
Phone (direct): (973) 584-4235
web: http://www.marcpaolella.com

There is more to look at than credit score, check with their current landlord for one, job history and look at their credit report, first see if they are paying there car on time. without a car they cant get to work. if they cant keep that up they cant pay rent.