subject: Why should you credit check your tenant EVERYTIME [print this page] Why should you credit check your tenant EVERYTIME
Tenant Credit checks made on your tenant is a good way to make sure that the tenant is secure financially and that they do not have a history of missed payments as debt. As a landlord if your tenant has a bad debt history you don't really want history repeating itself on your watch. Credit checks are actually really simple and can be done very quickly in order to ascertain very quickly if you want to proceed with the application process and gather other references. You'll just need the details of the tenant in terms of name and their address history for the past three years. If they don't have these details then a credit check wont be able to be run.
Once you have these details and submitted the credit check online you will see if the tenant has any undisclosed addressed, CCJs, bankruptcies or insolvencies and if they are on the electoral register. From all this information you will see a credit score and can determine the next steps you want take. Most credit score will come back suggesting that you should seek extra references. Even if the check comes back all clean then you should still seek extra references just to be sure!!
The reason why tenant checking is so important are very simple and make a lot sense. Imagine if you have tenant who has a bad debt problem, but you didn't reference them and were unaware, and 2 months down the line they have defaulted on their payment? You will have to cover that cost month on month until you can recover the money or get the tenant removed from the property, which again is costly and time consuming.
Tenant references are equally important, if a landlord warns that the tenant you are thinking of accepting trashed their property, but you didn't check, then you have no way to protect yourself from a destructive tenant.
Tenant references and tenant credit checking can make life for a landlord much easier. It's the quickest and easiest thing you can do to protect your property investment from the unknown tenant.
