Credit Repair

Running Credit Checks On Prospective Tenants – A Brief How-To Guide

When it comes to running credit checks on prospective tenants, there are several things that you need to take into your careful consideration. The process of credit checking is crucial in this regard, as it helps you to get a better understanding about the financial history of the prospective tenants as well as how responsible they have been with their finances. Depending upon whether the credit history of the applicants have been good or poor, you can determine if they are financially sound enough to ensure timely payments of the rent. Following are some basic steps that you must follow as part of the process.

Written Rental Applications

In order to run credit checks on prospective tenants, the first thing you have to do is to ask the applicants to complete written rental applications, where they must provide some basic information, such as the contact details of the former landlords, employment status of the applicants, their credit score, and any thing else that prove their financial strength. Having these applications will make the task much easier for you.

Charge A Nominal Fee For The Application Forms

You may have to pay a certain amount of money as part of the process of credit check. A good way to cover that cost is by charging the applicants a nominal fee for the rental application forms. Make sure that whatever fee you are charging is reasonable enough, something that the applicants do not mind paying.

Verification Of Employment Status

The next step to run credit checks on prospective tenants requires you to verify the details provided by the prospective tenants in the rental application forms. The verification is an important step, as some unscrupulous applicants may try to provide false information in an attempt to qualify as a tenant. You can contact the employers to verify the employment history of the applicants. Likewise, you can also contact the banks and other financial institutions to confirm that the information provided in the forms are accurate.

Check The Rent Payment Records

You also need to make sure that the tenants you are selecting have been good in paying their rents in time. You can check their payment records by contacting their former landlords. The former landlords may recommend a specific applicant or may warn you against others, you must take both into serious consideration.

Verify Credit History

In order to run credit checks on prospective tenants, you also need to look into their credit history. You can contact the three major credit bureaus (Trans Union, Equifax, and Equinox) and request them to send the credit reports of the applicants. Review their credit reports thoroughly.

Contact A Professional Agency

If you are not satisfied with your own investigation or if you do not have that much time to do this on your own, you can consider hiring a professional agency with specialization in screening tenants. These agencies will do a thorough screening and then send you detailed reports on the payment history of the applicants. The agencies also charge a certain amount of fee for their services.

Last, but not the least, it is also very important for you to keep in mind that it is illegal to select tenants on the basis of certain discriminatory factors, such as race or gender. If you do so, discriminatory complaints can be filed against you. Your selection must be based on just one factor – the financial history of the applicants, which you can find out by running credit checks on prospective tenants.

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