It’s crucial to run a tenant credit check on any tenant no matter how solid the person appears to be. But tenant screening is not as simple as running a credit report and then signing off on a lease. Here’s why:
1. The most obvious reason to run a credit report on a rental applicant is to evaluate the applicant’s sense of financial responsibility. Just like credit card, cell phone, or utility payments, a lease agreement is a revolving account. Does the person have a habit of disregarding the due dates on other revolving accounts? If the answer is yes, then that pattern could repeat when it comes to rent payments.
2. Another important reason to run the tenant’s credit is to verify that the person applying is who they say they are. Identity theft is a real risk, and landlords have encountered tenants who used the names of other family members or strangers to avoid a tenant background check. Determine if the credit report tracks the information in the rental application.
3. Criminal and eviction reports are crucial components of a background check, yet those reports alone may not catch a dishonest applicant. It’s the cross-referencing of tenant screening reports — including the credit report — that reveals gaps and inconsistencies. For instance, a tenant may have lied about a previous eviction, while the credit report was impacted by a judgment for unpaid rent.
4. Someone with good credit will want to keep it that way. That provides a landlord with a carrot-and-stick strategy when it comes to on-time rental payments. By signing up to Report Rent Payments, the tenant understands the importance of consistent, on-time rent payments. But if the person has bad credit to begin with, a few more late payments may not matter. For those with good credit or those who want to build credit, timely payments become a priority.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
Click Here to Receive Landlord Credit Reports.
Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.