Landlords evaluating credit with care

The nation's economic problems have left many renters with spotty credit reports. Recognizing this, many landlords are taking extra care when they're performing tenant credit screening.

Property managers are looking past some applicants' poor credit reports and using their payment histories and financial reputations as a guide to determining if they're a reliable tenant, reports NPR. In some cases, landlords are recognizing that even former homeowners who lost their home to foreclosure can make dependable tenants, as long as they have stable sources of income.

"In this economy and in this climate, we are seeing people who got caught up in the housing crisis, so we do take that into account," Cindy Clare, president of Kettler Management, told the source. Some landlords are relaxing their credit standards and focusing less on an applicant's past bankruptcy or foreclosure, she added. "Somebody might have gone into bankruptcy because of the housing market versus just someone that didn't want to pay all their bills, for example."

Foreclosures can be one of the most damaging marks against a credit score, said the report, but many of these consumers still have stable income.

A report from the Detroit Free Press earlier this month added that having shed their largest monthly expense – their mortgage – many former homeowners likely have a steady enough income to make a reliable tenant.