HOW TO READ AND USE YOUR CREDIT REPORT

As a landlord or private lender you want to review the credit report to see if you should allow this tenant to move into your property.

Unfortunately, very few tenants have perfect credit, this is often why they are renting. Especially with low income tenants, be aware that many will have unpaid medical bills. Medical bills are often disregarded by landlords.

What should not be disregarded are public record filings of evictions!

Try to differentiate between temporary problems and a general attitude of financial irresponsibility such as multiple charge-offs, car repossessions (often described by the tenant as "giving the car back to the bank") and so on.

Just because a tenant has poor credit does not necessarily mean you should reject them totally, especially in a low income area, but you should certainly consider asking for a larger security deposit. And please don't fall into the trap of agreeing to accept the rest of the security deposit a month or two after they move in. Once they are in your property this will very seldom be paid.

Good Collection Practices

Good collection practices start BEFORE the tenant moves in. You need to stress the importance of paying on time and how no excuses will be tolerated for late payment.

As a landlord dealing in low income homes, I would tell my tenants something like this, "I see you work at Publix (or where ever they work) and this is how you feed your family. I feed MY family with the rent you pay me every month. If you don't pay me on time, I can't feed my family. And if this happens I will have no choice but to evict you as quickly as I can and replace you with people who will pay on time."

Now this might seem very tough and rude, but this is pretty close to way you need to come off to your tenants. Now obviously you don't use these exact words if you're renting a $2,000 a month waterfront condo!

But if you go into the relationship with your tenant giving them the idea that you're a rich landlord and they can make you wait for your money, YOU WILL BE THE LOSER.

REMEMBER: You can train your tenants or they can train you!

Loan Type Abbreviations
MN Open/Monthly Account. An account to be paid in full after each billing.	IN Installment Account An account with a fixed number of specified payments. Mortgages or car loan for example.
RV Revolving account. An account with regular monthly payments on the balance due. Such as credit cards.	UN Unknown account. An account with an unknown loan type.
OT Other companies account being collected. Usually indicates a collection agency.

Payment Record Codes

Loan Type MN IN RV UN

Too new to rate. Approved but unused O0 I0 R0 U0

Pays (or paid) within 30 days. Pays as agreed O1 I1 R1 U1

Pays (or paid) in more than 30 but less than 60 days 02 I2 R2 U2

Pays (or paid) in more than 60 but less than 90 days O3 I3 R3 U3

Pays (or paid) in more than 90 but less than 120 days O4 I4 R4 U4

Account at least 120 days overdue, yet to go to collection O5 I5 R5 U5

Wage earner plan or similar payment agreement O7 I7 R7 U7

Repossession O8 I8 R8 U8

Bad debt, placed for collection, skip O9 I9 R9 U9

Equal Credit Opportunity Act (ECOA) Codes and Definitions
Undesignated-O Individual's association with this account is unknown	Individual -1 Individual has contractual responsibility for this account
Joint Account-Contractual Responsibility-2 Individual has contractual responsibility for this account. There may be others who also have contractual responsibility for this account.	Joint Account- Authorized User-3 Individual is only authorized to use this account. Someone else has contractual responsibility.
Joint Account-Participant-4 Creditor/repository is unable to distinguish between Joint Account-Contractual Responsibility or Joint Account-Authorized User.	Co-Signer-5 Individual has co-signed for this account and becomes liable if signer defaults.
On Behalf Of-6 Individual has signed to secure credit for another individual other than spouse and becomes liable if the other individual defaults.	Signer-7 Individual is responsible for this account, guaranteed by a co-signer.
No Longer Involved -8 Individual is no longer involved in this account.

FCRA Guidelines

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Private mortgages seller financing discounted mortgage

A division of Mortgage-investments.com, Inc.
4905 34th Street South #5600, St. Petersburg FL 33711
Fax 1-206-666-1880

Click here to contact us by email: