Best way to run credit for potential tenants?

Question

Hello,

I have been doing the landlord routine for the last 6 years. I have 28 units now and it's time to improve my systems and look for better ways to run credit, etc. I have mostly low-income tenants with poor credit (which is fine). I'm mostly looking for eviction records and/or judgements from property management companies. Is there a quick and cheap way to do this?  Any suggestions???

Thank you.

Andrea Collatz · Answer

Jesse M.

Great point! It's actually a soft hit to the applicant's credit whether the landlord or the applicant pays. This is because of our screening process which allows the applicant to "push" their credit report to the landlord.

Jesse M. · Answer

Smartmove user here. One good thing about this that I don't really see mentioned is that when the applicant pays (instead of the landlord) it registers as a soft hit to their credit, rather than a hard hit, so it won't affect their credit rating. I take the applications and send them a link from Smartmove.

Rick S. · Answer

Hi @Jeff Kennedy the only concern with allowing the tenant to provide you the credit report themselves is that they could easily create a fake report.  Also, that would only include the credit report and not the criminal and eviction search provided by some of the services.

What I would recommend is to utilize an online application or paper application so that the tenant doesn't have to pay an application fee just to submit the application to you.  If an applicant passes your initial criteria then at that point you request they complete the background/credit screening.  With SmartMove you can elect to have the applicant pay the screening fee directly to SmartMove so that you don't have to handle the fee.  That way only the applicants that you are actually considering leasing to have to pay a fee for the background check and the others that don't pass your initial criteria aren't paying a fee.  On your application you could include a statement that there is a $30 or $35 application fee required to ensure only serious applicants apply, however you wouldn't actually be collecting that with the application.

Sorry for the long reply but let me know if you have any other questions.  Thanks!

Andrea Collatz · Answer

Hi @Jeff Kennedy

I'm a representative with TransUnion SmartMove. We have different pricing options depending on the screening package you want. BiggerPockets Pro members receive a discount on each screening and you have the option of paying for the service or you can have the applicant pay. You can find pricing information here:

https://biggerpockets.mysmartmove.com/SmartMove/landlord-credit-check.page

Jeff Kennedy · Answer

@Kim Younkin @Rick S. Thank you for the replies. How much does the SmartMove cost? Is there a low-cost service out there that the tenants can go to and print their own report so that they don't keep getting charged by multiple landlords when they are applying for several places?

Thank you!

Rick S. · Answer

@Jeff Kennedy SmartMove by TransUnion is a popular one, however it does require the tenant to have an email address and be able to verify their identify on the site so that may not work with some of your tenants.  Otherwise that is another possible one you can check out as it does include the criminal and eviction search.

Kim Younkin · Answer

@Jeff Kennedy, we use FabCo. They do national eviction searches as part of their rental background check, and they do a criminal and credit check, too. I think they charge us $100/year membership fee plus a fee per application run, which is not terrible. $20 or under, I think (I'd have to check with our office manager). We recoup it in the app fee of $25 for a single renter and $40 for a couple. Their website is clean and easy to use to get info..