To determine who the landlord will decide to be more creditworthy, we need to evaluate several factors from their applications. However, the key metric here is the debt-to-income ratio, which provides a clear picture of their financial stability by comparing their debt level to their income. Let's analyze both Jaina and Tomas step-by-step.
1. Years at Job:
- Jaina: 5 years
- Tomas: 2 years
While Jaina has been employed for a longer period, which might suggest job stability, it's not the most critical factor in determining creditworthiness.
2. Monthly Salary:
- Jaina: [tex]$1,850
- Tomas: $[/tex]2,500
Tomas earns more per month, which could be beneficial, but again, this alone doesn't provide a complete picture.
3. Number of Credit Cards:
- Jaina: 4
- Tomas: 1
Having more credit cards indicates Jaina possibly has more available credit, but it also comes with the risk of potentially higher debt.
4. Total Debt:
- Jaina: [tex]$13,000
- Tomas: $[/tex]7,000
Jaina has significantly more debt than Tomas.
5. Late Payments in Past Year:
- Jaina: 5
- Tomas: 1
Tomas has been more punctual with his payments compared to Jaina.
The decisive factor is the debt-to-income ratio. Let’s calculate it:
- Debt-to-Income Ratio for Jaina:
[tex]\[
\text{Ratio}_\text{Jaina} = \frac{\text{Debt}_\text{Jaina}}{\text{Monthly Salary}_\text{Jaina}} = \frac{13,000}{1,850} \approx 7.03
\][/tex]
- Debt-to-Income Ratio for Tomas:
[tex]\[
\text{Ratio}_\text{Tomas} = \frac{\text{Debt}_\text{Tomas}}{\text{Monthly Salary}_\text{Tomas}} = \frac{7,000}{2,500} = 2.8
\][/tex]
Given these ratios, Jaina’s debt-to-income ratio is approximately 7.03, whereas Tomas’s debt-to-income ratio is 2.8.
The lower the debt-to-income ratio, the better the financial position of a tenant, indicating that they are better capable of managing and repaying debt relative to their income.
Conclusion:
The landlord will decide that Tomas is more creditworthy because the ratio of his debt to income (2.8) is significantly less than Jaina's debt-to-income ratio (7.03). This suggests that Tomas is more likely to manage his financial obligations effectively and pay rent on time.
