> For the complete documentation index, see [llms.txt](https://help.rentzap.com/help-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.rentzap.com/help-docs/guides/criteria-building-guide/guarantors.md).

# Guarantors

###

#### What is a Guarantor?

Definition: A guarantor is someone who:

* Is financially responsible for the lease
* Does NOT occupy the property
* Must pay if the tenant doesn't

Important Distinctions:

| Term                  | Occupies Property? | Financially Responsible? |
| --------------------- | ------------------ | ------------------------ |
| Guarantor (Co-Signer) | No                 | Yes                      |
| Occupant              | Yes                | Varies                   |
| Roommate              | Yes                | Yes (joint lease)        |
| Co-Applicant          | Yes                | Yes                      |

***

#### Guarantors Allowed

What it controls: Whether you'll accept guarantors at all.

Default Setting: Yes

⚠️ Recommendation: Select "Yes"

Why allow guarantors:

1. More Approvals: Applicants who fall slightly short on income or credit can still qualify
2. Risk Mitigation: A financially strong guarantor reduces your risk
3. Competitive Advantage: Many markets expect this option
4. Automatic Offering: If enabled, our team can automatically offer a guarantor as a solution when someone doesn't quite meet your criteria

How it works:\
When an applicant fails income or credit requirements by a small margin, our team will:

1. Notify the applicant they need a guarantor
2. Explain what's required
3. Send them a guarantor application link
4. Review the guarantor's finances
5. Approve if the guarantor meets your guarantor criteria

***

#### Guarantors Allowed for Income

What it controls: Whether a guarantor can apply alongside an applicant who falls short of the income requirement.

Default Setting: Yes

How it works:

* Applicant income: $4,000/month
* Required income at 3x for $2,000 rent: $6,000/month
* Shortfall: $2,000/month
* Guarantor must make at least 4.5x the rent (see below)

Requirement: Guarantors must meet the income level set in "Guarantor Income Requirement" (below).

***

#### Guarantor Income Requirement

What it controls: Income multiplier required for guarantors.

Default Setting: 4.5x monthly rent

Why higher than your standard requirement?

The logic: If a guarantor is making 4.5x the rent, they presumably:

1. Can cover their own living expenses
2. Have margin to guarantee someone else's rent
3. Present lower risk of defaulting on their guarantee

Common Concern: "But the guarantor doesn't have enough to pay their mortgage AND the rent!"

Our Response: That's exactly why we set it higher. At 4.5x, they have a better financial cushion to handle both obligations if needed.

Example:

* Property rent: $2,000/month
* Standard income requirement (3x): $6,000/month
* Guarantor requirement (4.5x): $9,000/month

***

#### Guarantors Allowed for Credit

What it controls: Whether a guarantor can apply alongside an applicant who falls short of your credit requirement.

Default Setting: Yes

How it works:

* Applicant credit score: 570
* Required credit score: 600
* Guarantor must have a credit score meeting "Guarantor Credit Requirement"  

***

#### Guarantor Credit Requirement

What it controls: Minimum credit score for guarantors.

Default Setting: 650 (50 points higher than the default 600 applicant minimum)

Why higher than your standard requirement?

Better Credit = More Reliability:\
A guarantor with stronger credit is:

1. More likely to honor their guarantee
2. Less likely to default themselves
3. More financially stable

Social Pressure:\
Someone with good credit (650+) has more to lose by letting an applicant default. They're more likely to:

* Step in and make payments
* Hold the tenant accountable
* Protect their own credit standing

Mathematically Possible:\
Setting guarantor requirements higher than applicant requirements makes mathematical sense - the guarantee can lift a borderline applicant into approval range.

***

#### Third-Party Guarantor Services

Question we often get: "What about services like TheGuarantors, Leap, or Rhino?"

Answer: We don't accept third-party guarantor services.

Why not:

1. These aren't actually guarantors - They're insurance products where the company, not an individual, guarantees payment
2. Collection challenges - Much harder to collect from a corporation than an individual co-signer
3. Lease enforcement - You lose leverage when your guarantor is a faceless company
4. Underwriting differences - These services have their own approval criteria that may not align with yours

What they are: Insurance/surety products, not personal guarantees.

Alternative: If you want to offer this type of product, evaluate it separately from your standard guarantor policy. Some property managers accept these services but treat them differently than personal guarantors.