I'm new to BP, and new to focused renting and REI. However I'm decades into both residential and commercial rentals. Up until recently, it has been a sideline or ancillary to my normal business.

We have some residential properties that are co-located on our personal residence (large property). Traditionally we've rented them to known people, family and friends. The screening process was informal at best. 

In 2018 we decided to publicly list one of our properties for rent in anticipation of beginning to purchase some additional REI for long term hold and rent. We had a good response and one of the candidates (a couple) passed the initial interview well enough.

We utilized TransUnions Smart Move product to conduct the screening and the couple came back with a low credit score, but it was based on the complete lack of credit information. Basically someone who had lived a cash life, or so it seemed. The little bit there had plenty of age on it but there was almost no credit file. Having worked in credit in the past, I've seen files like this. Uncommon but not unheard of. Some people just don't trust credit and don't want any. Everything else checked out with no problems. Criminal, background, etc. All squeaky clean. According to TransUnion, I should have rented the property to these people and I had green lights on the summary report. 

Because this is our personal property (read, our kids are here) we called in a favor for an additional screening through a source that I won't name, but safe to say it is more able to get the real story. The answer from that person was 10 pages of criminal background. Nothing felonious or dangerous, but PLENTY that told us to run screaming and a good bit that should have shown up on the TransUnion report. As best we could tell, the people were scam artists and had taken on a false identify. Nothing in the Transunion product hinted at anything wrong. Maybe calling references would have picked up on this, but references can be faked much easier than a credit file. 

We told the people to go away, and they were quite pushy trying to get us to take them. Obviously we sent them packing and moved another applicant into the property who passed his background check. 

My question is, did I find the bad needle in the haystack and this was a one in a million occurrence or are the publicly available background check tools effectively useless? I have little faith in what I am seeing as they are all pulling from similar data. I'm moving over to Cozy as we speak, and they offer a background check as part of their process. But I have no reason to expect that their check will be better than the TransUnion check. 

What are others experience on the validity of background checks? Have you seen false identities in your checks? Can I trust Cozy for a proper background check? What steps are you taking besides the background check and calling references?