Credit Repair

Tips To Do Credit Checking On Prospective Tenants

Considering the rising number of instances where landlords have to suffer huge losses just because their tenants do not pay the rents in time, credit checking of the prospective tenants has now become an important part of the process when it comes to renting a property. Landlords want to make sure that the tenants they are renting their properties to have good financial history. They take it as a low risk venture because better credit files of the tenants mean timely payments of the rent. Following are some useful tips in this regard.

Written Rental Applications

If you are talking with the prospective tenants verbally, you may not be able to find out the necessary details properly. When you have insufficient information, you will not be able to make the right decision. That is the reason it is always wise to ask those who are interested in renting your property to complete a written rental application. They must provide complete details in the application, such as the names and addresses of their former landlords, employment status, and credit score. Though you may not ask them to attach their credit reports, you can easily access the same by contacting the major credit bureaus. You may be asked to pay a certain amount of fee for this. A thorough will get you in-depth information on how good or bad they have been in managing their finances.

How to Cover the Cost of Checking Credit

You may have to spend a certain amount of money while you are doing credit screening of those who have submitted rental applications. Since you are going to rent the properties to a limited number of tenants, you may be wondering how to cover the expenses made on checking credit histories of those individuals. A simple idea is to charge a rental application fee. This way, you can easily cover the cost of running credit checks on the applicants.

Verification of Other Details

If you are satisfied with the credit reports of the applicants, the next thing you have to do is to verify the employment and other financial details provided in the rental applications. You can call their employer and get things verified. Likewise, you can also contact the banks or financial institutions to verify if the financial details provided by the applicants are correct.

Payment Records

It is very important for you to keep in mind that credit checking is not just about reviewing the of the prospective tenants. The process also involves contacting the former landlords of the applicants and checking details about the payment record of the applicants as tenants.

If you do not want to take the pain, you always an option to contact an agency who will run credit checks on all the applicants on your behalf. The reports submitted by these agencies will get you a good idea on the future ability of the prospective tenants to assume financial responsibility. However, it is also important to note that credit checking does not allow you to discriminate on the basis of race, gender, or other discriminatory factors.

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Posted in Credit History, Credit Repair | 2 Comments »

2 Responses to “Tips To Do Credit Checking On Prospective Tenants”

  1. robert says:

    Very Wisely described. Today it’s a big issue that the tenants do not pay the rents in time. After reading this article, the Landlords should be aware about those tips that are very necessary while renting their property. It is clearly described in the article that landlord should determine the necessary information from the tenants like the address, Telephone number, employer’s detail and so on. It is also the responsibility of the landlord itself to verify the information given by the tenant. If the tenant does not give the rent on time, the landlord is authorized to direct the instructions for the same. Also, the landlord should deposit all the necessary information to the Police Station. I think these wonderful tips will really help to do Credit Checking On Prospective Tenants

  2. Rakson says:

    Very informative and feasible ways to do credit checking on prospective tenants! I also have two houses which I have given on rent. But I only used to consider Rent Agreement as the most important document and definitely at the most checking the present company name with which the tenant is employed. If we do keep such checks such as the names and addresses of their former landlords to check timely payment of his rent, employment status to check whether he can afford to pay, and credit score to check his credibity. We will be saved from lot many troubles if we follow these steps. Great way to deal with prospective tenants… I will definitely from now onwards will follow this. Though luckily I have not yet faced any of such problems!

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