How to do a credit check on a potential renter

How to Run a Tenant Credit Check

How to do a credit check on a potential renter


how to do a credit check on a potential renter

How to Screen Potential Tenants – Questions, Credit & Background Check

May 21,  · Use A Reputable Agency The best way to get a credit check on prospective tenant applicants is to use a reputable agency that you can be sure will do the work the proper and legal way. Obtain a Complete Rental Application and Permission to Run a Credit Check From Each Tenant 18 Years or Older. Provide a pre-printed form for each tenant to complete to gather his or her full name, birth date, Social Security number, previous address, and Estimated Reading Time: 5 mins.

Getting a credit dl on a potential tenant is a common practice in California. A credit report can reveal past failures of an individual to honor financial contracts. Considering the work it takes to rent a property, it only makes sense to verify the financial responsibility of the person promising to pay crdeit.

Getting a credit report usually requires only a small fee, financial information and credjt from the prospective tenant. Collect financial information from the potential tenant. To obtain a report, you will need your tenant's name, Social Security number, address and date of birth. You may also ptential to ask for bank and employment information, both to see that your tenant has a source of income and to verify that he has funds available crecit payment. You digital rectal exam what to expect either create your own form or use a common landlord template.

Get written permission. You can only obtain the credit report of another individual if you have written permission. Verify provided information yourself. Before you pay a fee to any service, confirm that ppotential financial and employment information you hwo given is accurate.

If your potential tenant lied on her application, there is no need to do the extra work of obtaining an actual report. Pay a service. Depending on the amount of the fee you pay, a vendor may offer you additional information such as a credit score or other background information on your potential tenant. Review the information with your tenant.

Credit reports often contain mistakes, so if a report comes back with negative marks, you may want to ask your tenant to explain. Other times, honest debtors fall into unfortunate situations through little fault how to get over childhood trauma their own, such as when a spouse or former partner runs up debt in someone else's name.

If you otherwise trust and like your potential tenant, allow him the opportunity to explain. Report any negative decisions. If you refuse to rent to someone based on information you receive in a credit report, you must rnter a letter to that person explaining your reasons. You must also include a reference to the federal law that grants someone denied credit 60 days to obtain a free credit report.

Csiszar has served as a technical writer for various financial firms and has extensive experience writing for online publications. By John Csiszar. Related Articles.

Why is tenant screening important?

Do your tenant background screening on potential renters with only the name and address from their rental application release form and receive their tenant screening credit report and score directly from Experian.. Credit Score and Credit Score factors (VantageScore ® credit score); Best Name, AKAs, SSN, Current/Previous Addresses and Current/Previous Employers. Steps of the tenant screening process: Pre-screen prospective tenants with a questionnaire. Collect the tenant’s information via an application form. Conduct a background check for credit and criminal freenicedating.comted Reading Time: 8 mins. Jan 21,  · Background checks can take place after a prospective tenant submits a rental application and are typically done along with a credit report. Typically, a background check on a prospective tenant will: Verify the prospective tenant’s identity. Check criminal history at county, state and federal freenicedating.comted Reading Time: 9 mins.

Ready to learn how to check the credit score of a potential tenant? Think you can simply log in online and have all the answers that you need in a just a few minutes? While running a credit check on a prospective tenant might seem like something that you need to do as soon as you receive a rental application, there are a number of things that you need to consider before you rush ahead without thinking about why you really need to do this and how it will benefit your rental business.

Ultimately, a credit score and report can be the ultimate indicators of whether or not a tenant can be trusted as reliable. The best way to get a credit check on prospective tenant applicants is to use a reputable agency that you can be sure will do the work the proper and legal way.

When you are trying to do the reporting yourself, it can be overwhelming, and there is the chance that you will make a mistake and end up in some legal trouble. To save yourself both the hassle and the risk of doing this yourself, using a reputable agency that specializes in screening checks is a great way to protect yourself while simultaneously getting all of the information that you need.

Plus, specialized agencies like RentPrep will help you decode what the information you are receiving means for you, your properties, and your business. All of these factors make using a professional agency the best method for running credit checks. The three most commonly used credit bureaus — Experian, TransUnion, and Equifax — all have credit check services that can be used by landlords for either a small fee or for nothing at all.

The reports that these services give, however, may not have the specific details that you could get from a specialized reporting service.

Each of these credit bureaus may have different information, so it is possible that you will not be getting the complete picture if you do not check out all three or use a service that will balance which files it checks before coming back to you with a completed report. Ultimately, we believe that specialized services can help you get a fuller picture of what the applicant might be like as a tenant. How can this information tell you whether or not an applicant is a worthwhile risk? Look for any accounts that are labeled as discharged, past due, or in collections.

Usually, this can be found on the first page of a credit report when you first look at it. All of these account markings are indicators that the tenant had trouble paying their bills on time or at all. Does the report show any of these negative aspects? Usually, they are marked on the list of accounts on each page of the report.

The details of each situation might not be given, but the basic flagging details should be enough to let you know what happened. Looking at individual accounts and loans, you can find out if there were late payments. Additionally, check the number of late payments and how late the payments were. This information will paint a picture of how reliable the tenant could be. Ultimately, the credit report that you receive might end up being a major factor in the decision you make about whether or not to rent to a specific applicant.

Pending their answers, you might decide that they are worth the rental risk after all. If you decide that you will not rent to someone because of their credit report, it is your responsibility to send an Adverse Action letter detailing why you are rejecting their application. If you decide to rent to someone with a less-than-ideal credit score and you want to charge more for a security deposit as a form of risk-protection, you will also need to send out a similar Adverse Action letter detailing what requirements you are adding and why they are necessary to add.

You might even want to collect a fee to cover the cost of running the credit report, but that is ultimately up to you to decide. Make sure that you ask for the following information on the rental application form so that you can run the credit report quickly and accurately:. This should be added as a clause to the rental application that must be signed and dated by the tenant.

If you do not have their permission as stipulated by the Fair Credit Reporting Act, you could get in some legal trouble for trying to run a report. Finally, you will also need to let the tenant know that it is possible for them to get a copy of the report that you receive.

You should give them detailed contact information for the reporting company so that they can do this if they decide that it is necessary to do so. Have you ever tried to run a report with the information that was provided to you in a rental application only to discover that all of the information was incorrect? Most landlords have encountered this situation at one point or another. Before you set out to run a credit check on a prospective tenant, pick up your phone and do some basic verification.

First, call their employer. Confirm that they have the same address listed on file with the employer and that they have truly been working there for as long as they say that they have been working there. Then, call their most recent or current landlord. Confirm that they lived where they said they did. Once you have this information confirmed, you can file the necessary paperwork to run a credit check. As you can see, there is a lot that can be riding on whether or not a credit report comes back positive.

Many landlords ultimately deny a potential tenant because of their credit report, so running a credit check on a prospective tenant should be one of the most important parts of your screening process.

To get the full lowdown on how to screen tenants in the most effective way possible, let RentPrep assist you in your tenant screening procedures. Q: Can I still close on my property in state? Q: Do I still have to pay property taxes? Q: Do I still have to pay my water bill? Alternatively, Run It Directly The three most commonly used credit bureaus — Experian, TransUnion, and Equifax — all have credit check services that can be used by landlords for either a small fee or for nothing at all.

Experian Equifax TransUnion Each of these credit bureaus may have different information, so it is possible that you will not be getting the complete picture if you do not check out all three or use a service that will balance which files it checks before coming back to you with a completed report.

There are three main red flags that you should be looking out for. Negative Items Look for any accounts that are labeled as discharged, past due, or in collections.

Prior Evictions, Foreclosures, Bankruptcies Does the report show any of these negative aspects? Late Payments Looking at individual accounts and loans, you can find out if there were late payments.

Accepting Or Rejecting Ultimately, the credit report that you receive might end up being a major factor in the decision you make about whether or not to rent to a specific applicant. You can continue the rental process. Verify Basic Information Before Running The Report Have you ever tried to run a report with the information that was provided to you in a rental application only to discover that all of the information was incorrect?

Check Up On Applicants As you can see, there is a lot that can be riding on whether or not a credit report comes back positive. Alabama Content here.



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