Do you qualify a prospective tenants application first; job, income, references then have them pay for a credit report, background check, etc.? For example, have my potential tenant pay application fee, I do my due diligence and determine the app is okay so far and then request the tenant go online to my back ground/credit check, eviction check provider were the applicant can pay for that there, and then make my decision? Should this be done one tenant at a time? Evaluate one, determine yea or nay, then go to the next one. I don't think having 5 potential suitors all pay app fee and then pay for back ground check for only one unit is a good idea.
I have prospective tenants apply first through Transunion MySmartMove. They pay them directly for the credit check. I do not take any rental application fees from them. If they pass the credit screening, then I go on to verify employment, salary, landlord references etc.
My process goes like:
- review for completeness, missing data is disqualification (DQ)
- app requires income verifications (Pay stubs, Bank deposits)
- can't provide = DQ
- obvious criteria issues, eg income below your criteria = DQ
- verify employment
- verify past 2 landlords
- THEN and only then order CR,BG reports
- now evaluate by your criteria (mine is the 30,60,90 lates and recent write-offs)
This is my basic order:
- Supply rental criteria to potential applicant and they need to verbally agree to the criteria. This allows the unit to be shown to the applicant. No agreement - no show.
- Take the application with the application fee and proof of income (pay stubs, tax returns, etc).
- I perform the credit/background check. (youcheckcredit.com)
- In my area, I then check criminal and civil court records.
- I perform an employment check with income verification.
- I perform previous landlord check.
- I perform reference checks.
I do this for all applicants leasing together as a group.
The first thing you should do is look at supporting documents to confirm their identity. You can look at their Social Security card, Drivers License and paycheck stubs to make sure all information is consistent with the application.
Then, process the credit check first. Don't waste your time making verification calls if they don't meet your credit criteria. Besides, how do you know you're actually calling the right person without seeing the address history on the credit report? You should use the address history to verify addresses listed on the application, then do a title search on those properties to identify the owner before calling.
Don't forget to send an Adverse Action Notice to anyone you deny or conditionally approve. Then, move on to the next applicant. Feel free to contact me directly with additional questions about tenant screening. Good luck!
@Alex Hamilton - good point on the identification. I require a copy of a government issued ID to be submitted with the application. My credit/background check verifies applicant name against DOB against SSN. It also verifies known addresses. Any discrepancies are shown in the reports.
I have rejected applicants when trying to apply using false identification data. If I have to rerun based because it was a "mistake", the applicant pays the fees to run another report.
I'm new at running background checks. I screened a set of tenants by reviewing income and application. Before calling references, we used ScreeningWorks to background check and I called customer service to help explain the reports. For example, on the couple we ran the credit scores it came back with one suggesting that we obtain a higher deposit since they had payment issues in the past. The criminal background only goes back as far as the state will legally allow it to. You'll have to decide your policy on any legal/criminal issues. Both tenants had criminal activity; however, the male had a common name and had never lived in the state where the crime was committed. The courts scrub the social security data on criminal cases so the screening has to go by registered addresses, date of birth, name, etc. If there's a common name, then the data can be wrong. Sometimes, these reports can be a bit tricky to read so it may not be a bad idea to share the report with the tenant if there's a question. Tenants may dispute their records if they are incorrect.