subject: How Can You Check Tenant Credit - So You Can Choose The Good Ones? [print this page]
During the initial interview process most candidates will be reluctant to admit that they may have bad credit. Despite the fact that all potential tenants may seem pleasant, as a businessperson, your aim is to run a profitable property investment business.
So rather than run the risk of accepting tenants that may turn out to be perpetual rent defaulters, a private landlord must check tenant credit without exception.
Carrying out a full tenant credit check is part of the tenant screening process and an important part. If you thoroughly check tenant credit it will help you make that all-important decision "which tenant is best for my business". It also helps you avoid future costs that you would have to incur in order to manage a problem tenant if you get it wrong.
When you check tenant credit on all potential tenants, you steer clear of troublemakers and zero in on dependable tenants. When checking tenant credit there are a number of steps to follow.
Wriiten Rental Application Form
First have your prospective tenant fill in a rental application form, you can draft this form yourself using the information you want to know as a reference point or you can download one from the internet free. The Landlord Protection Agency is a good source.
The application should have a place where the prospective tenant can fill in their basic information such as name, date of birth, telephone number and social security number. They should also provide you with two credit references and the contact details of their previous landlords.
Credit References
The credit reference can help you decide if the prospective tenant should be shortlisted, while contacting the former landlords can help you get information on whether the tenant used to meet their rent obligations on time.
When it comes to check tenant credit, one of the most important things you must include in the rental application form is a clause that clearly states that the prospective tenant has given you permission to run a credit check.
In order that you do not bear the costs of checking the credit history of several applicants, you might consider an application fee. If the prospective tenants are bona fide they won't object.
Tenant Credit Check Services
There are a number of organizations that private landlords can use to check tenant credit. Knowing what type of report you want and what should be in the report will help you decide which service to go with.
Some services will provide you with a standard credit report as well the applicant's credit history. Others go even further and offer tenant screening, applicant's rental history as well as any criminal history.
Tenant Credit Check Scores
When you check tenant credit it is important that you get results from reliable sources. You can go to one or more of the three major credit checking agencies
-Equifax
-Experian
-Trans Union
or use a service that will get data from each of them.
Evaluate this information thoroughly for each prospective tenant, it will be time well spent now rather than cause for regret at a later date.
Request for Personal References
In some rare cases, the applicant may not have any credit history. In such cases, ask them for letters of reference from individuals that you regard as trustworthy, such as their pastor, employer or even their former landlord.
Don't take references for granted or at face value, follow up personally with the person providing the reference.
You are safeguarding your business when you check tenant credit.
