On paper, your tenant looks great: They have an excellent rental history and sparkling recommendations. Unfortunately, they disclose to you upfront (or admit when they fill out the paperwork) that they have bad credit. Should you shy away from this tenant? You may have struggled to get your property rented out, or you may be on the fence about other renters who have applied. In any case, it’s important to know your options when it comes to dealing with a good tenant with bad credit.

Start By Checking References

If your tenant appears excellent on paper and simply has a poor credit score, start by checking their references. Many things can cause poor credit scores: unresolved debt, unexpected debt or even a couple of years that were simply more difficult than others. You can’t tell by a credit score alone what put a potential tenant into a bad financial position. While you don’t want to ask those references what caused the poor credit — that’s a question for your tenant applicant — you can ask them about the tenant’s responsibility and behavior in the past.

These simple questions can tell you a lot about what the tenant will be like when they’re staying in your property. When you’re talking to references, ask:

• How often was the tenant late with their rent? A tenant who was never late with their rent, in spite of poor credit, is a good sign. On the other hand, a tenant who was frequently late or who didn’t pay their rent every month might not be a smart risk.

• Did the tenant take good care of the property? Did they notify past landlords promptly if any repairs were needed or if there was a problem? Did they take care of basic maintenance themselves? Was the property left in reasonable condition?

• How often did the tenant call about maintenance? Did they constantly have problems that needed to be addressed, or were they a fairly peaceful renter who rarely raised issues?

• How did the tenant handle interactions with neighbors? Were they a good neighbor, or were there frequent complaints about them? It’s particularly important to ask this question if you’re renting out an apartment building or condo, where the new tenant will be in frequent contact with others…