Finding the right tenant for your rental means the difference between receiving a check every month, or not. Having your prospective renter fill out an application for rent is a vital step in weeding through tenants who have a history of not paying and those who have excellent credit and an excellent reputation. In today’s world, the only excuse not to require a tenant background check, is if you know them personally. Even then, trust but verify for your own good. For a small fee, that the tenant typically pays for, the peace-of-mind you will have is well worth it.
Choosing a Tenant Screening Vendor
To make life simpler for you, the landlord, there are many services that offer tenant screening services. The two major credit bureaus provide their own retail products that you can choose from. Providers like, PreApproved Renter, provide reports from these vendors with additional tools to make your life easier, such as – auto-generating a lease or customizing your rental application.
Let’s take a quick look at these two providers:
Experian Connect: Experian credit check services will run a comprehensive credit check on your prospective renter. The service cost $14.95 which the applicant bears. Experian only provides a credit check on the client, which is fine if you know them personally. However, a credit check alone is not always the best option when renting out homes or apartments.
My Smart Move: Smart Move is perhaps the fastest background and credit check service for landlords. Smart Move will run a comprehensive credit check, as well as search for a client’s criminal record and see if they are on any sex offender list. They will also run an eviction search should it be requested. My Smart Move is compatible with PreApprovedRenter.com.
There are other services out there, varying in prices and packages. However, Experian, and Smart Move are the two major vendors for providing credit and background checks. In fact, most service providers are wholesalers for Transunion and Experian.
Gone are the days of filling out PDF forms, everything today is mostly done electronically. You no longer have to wait several days to a week for a screening report to come back. Most of these reports are generated seconds after your prospective tenant fills out an application form. Thus, you will find yourself filling your empty homes and apartments much more quickly.
If you are looking for a basic tenant background check provider, these two services offer the best value in terms of pricing. However, they may not provide additional features you need as a real estate professional.
What the Different Checks Will Show You
Credit checks for many years were the standard and often, only required check of any kind for a prospective tenant. These checks simply show an individual’s credit history and score, and if they can be trusted to make their payments. Generally speaking, a FICO score between 630-689 is fair, a score between 690-719 is good and 720-850 is excellent. Anything below 629 means that an individual has poor credit and could be at risk for making payments.
According to the Federal Trade Commission approximately one in ten consumers (approximately 45 Million Americans) have no established credit score. This can be a challenge for a landlord who is trying to determine whether or not to accept a tenant. In these cases we recommend asking for a co-signer or extra security. This can be the case with younger tenants who may have recently entered adulthood and simply have not had a chance to establish any credit.
Eviction reports will show you if the tenant has ever had a legal eviction before. Evictions are a legal proceeding and there are always records of an individual being evicted or being in housing court with a previous landlord. These are public records and by no means infringe on the privacy of an individual. Although some states, like New York, have made it illegal for a landlord to reject a client for tenancy due to the fact that they have been in housing court.
Keep in mind some evictions are warranted, some are not. You may want to sit down with a prospective renter and ask about any eviction proceedings on their record, especially if their background and credit is otherwise spotless.
Criminal Background Reports:
Criminal Background checks will tell you if a potential applicant is a sex offender, fellon, on a terrorist watch list or similar type of list. Landlords should be aware that federal law now bars housing discrimination against people with criminal records. While not all crimes are violent or warrant turning down a prospective tenant, the one situation a landlord should seek the advice of legal counsel for is if their property is near a school and a prospective tenant is on the sex offender list.
Other Tenant Background Checks You Can Perform
There are other ways you can learn about a prospective tenant. Sometimes you will run a background and credit check and something else may not seem right. Remember, you have no obligation to rent your property to anyone! There are some other things you can do to ease your mind.
Google Search for Tenant Background Check
You can run a google search on an individual and see what comes up. For example, if their application says they are self employed a simple search of their businesses name can tell you if:
- They are in fact a business owner and
- If they have a good reputation per their business reviews
Landlords can also search the following:
- [Tenants Name] “Evictions”
- [Tenants Name] + their [previous address]
- [Tenants Name] followed by the state that they live in
Often a Google search will not net much information, but sometimes it will. At times notorious people tend to make headlines as well or become well known in an area. This information can help guide your decision.
Social Media Search for Tenant Background Check
In the age of Social Media there are other checks you can perform. Many employers and landlords have turned to Facebook to see just what kind of people they are hiring or renting to. Facebook, Twitter, and Instagram can really show what a person could potentially be like. In many cases, people will reveal things about themselves via social media that you might never learn any other way.
For example, simply by looking at their videos and photos you may be able to tell – if they people who blast and play loud music, potentially setting you up for headaches with neighbors. Other photos may show you if they partiers who invite all their rowdy friends over for several games of beer pong. Do they appear to have questionable or even illegal activities that they participate in such as smoking which may be against your buildings policy.
While you may not be looking to rent to saints, you want to be sure that the tenant is going to respect your property and cause as few headaches as possible. Taking some time to do a bit of digging around on Google and Facebook or other social media sites may actually save you money and time going forward. An eviction costs an average of $3,500, take the time now and save your hard earned cash in the future.