Background and Credit Check

4 Replies

Hello All,

I have recently purchased a 4 bedroom house and I am beginning my search for tenants. I am curious about running background and credit checks on potential renters. What is the best way to do this? Any tips would be greatly appreciated.

Thank you in advance!

@Charles E. Bruckman Since you're looking for an option to screen your tenants, I suggest looking into free property management software. They usually include features that allow you to send out customized applications to your tenants and also take care of the tenant screening process at the same time. They also allow you to choose from several screening options, such as - credit, criminal and eviction; based on your preferences. 

Hi @Charles E. Bruckman , congrats on the quad!  Here are my suggestions:

  • Rental Applications:  It is important everybody 18 & older submit
  • Screening Reports:  There are several online sites that sell you screening reports.  Understand they all generate reports from one of three bureaus (Transunion, Equifax, Experian).  If you have a preference for a credit bureau, find a site that affiliates with your choice.  If not, any choice will suffice.
  • Ask Them To Explain Issues on Reports:  Have it in your mind where you draw the line for tolerating issues on their reports.  Personally, I'm not afraid of low credit scores as long as their score is progressing upwards.  I understand people go through hard times.  Therefore I look at the report to see if all their missed payments were in 2020 or 2016.  For criminal background issues, what level will you allow?  I've had tenants with DUI's and weed possessions.  Not a big deal to me.  But I won't ever allow somebody with a battery or physical criminal record for the safety of tenants and neighbors.
  • Interview Applicant: Ideally you meet them in person and can answer any questions. It important to learn about these individuals. What they're looking for, why they are moving, when they need to move and how long do they want to stay. All of that is important for negotiations. I'll offer $50 discounts if they stay for 2 years.

I can't state this last one enough.  Do not discriminate!  There are protected classes for a reason, check out the FHA protected classes. You can pay hefty fees if it's been determined you discriminated. Therefore it is best to always have a system in place that helps you justify your decision.

My system: first applicants to be approved and paid security deposit get the lease. It's cut and dry. Security deposit will reserve your spot and I pull the listing.

@Charles E. Bruckman Hey Charles,

Congrats! I wish you great success as you begin your new adventure. 

It's great that you are starting to consider your tenant screening options, as this is a very crucial part of being a successful landlord. There is a wealth of online tenant screening options that are available for landlords, but I can speak solely to SmartMove. SmartMove is an online tenant screening service that provides landlords with a credit, eviction, criminal and Income Insights report. In addition, landlords receive a ResidentScore, which is a score that is specifically for the rental industry (15% better at predicting eviction risk than a typical credit score). With SmartMove you can choose to pay for the screening yourself or pass the cost on to your prospective tenant.

All reports are delivered to your inbox in a matter of minutes so that you can make a quick and confident leasing decision! 

I hope this helps!

Best,

Sam Decker