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How to politely decline a potential applicant without offending?

I took applications from a bunch of prospective tenants,  all very excited and interested in the rental.  Of course I chose who I thought would be best.  How do I politely tell the other applicants that they didn't get the house?  I don't want to offend them by mentioning their bankrupcies long ago, or that the tenants I chose have a better track record and more money.  I don't want them to think they're not 'qualified', but I need to somehow break their hearts.    What do you say?
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Well, I would not tell them verbally. If you decide to notify them that their application was declined, I would send them a boilerplate application rejection form (there's one on this site under Application Forms). Basically, if you decide to notify applicants of their rejection, you don't want to be specific because it invites arguments, but rather say that their application was denied based on their credit and financial data, etc.
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