Rejecting applicants you believe would be poor tenants for one reason or another is a corollary to the whole process of getting good tenants. Rejection is hard for some people to take, still harder for others to give. Some landlords rent to the first person who is  interested in renting their place because they just cannot say “no”.

The trick is to say “no” in a kindly way. If you have more than one applicant for a vacancy, you are merely informing the unsuccessful applicants that you have rented the place to someone else.  You might call them and say: “we had four applications and unfortunately had only one vacancy”: we will keep your application on file in case something else comes up”.

If your dwelling has not been rented, however, such a rejection would be foolish and risky. Never say a place has been rented unless it actually has been. Such a simple-minded ploy will only cause you trouble. Even when you are not actually discriminating against someone, this falsehood, if discovered, could be construed to be a sign of blatant discrimination, and it could be all the evidence needed by those who thrive on suing unsuspecting landlords and landladies for discrimination.

Sometimes the best approach is honest and direct. It may not be kindly on the surface but it is-it deflates the applicants high hopes for your rental-they can realistically assess their prospects and will not waste any more time waiting to hear from you.  Tell the applicants by phone if possible, that they just do not fit your tenant guidelines so they can begin looking further for housing.
 
If you want to, give them the precise reason, do not give them the details of a negative credit report, give them the name of the credit reporting agency.  Be polite as possible while they argue their case. Do not budge from your decision, no matter what they do or say. (Be consistence in your policies)
  
Throughout this whole selection process, be as conscientious and organized as a first grade teacher and you will find that your “luck” in getting good tenants will improve as if by magic.