How To Order Credit Report For A Tenant?

“How To Order Credit Report For A Tenant?” written by Mike Marko

Are you in the middle of your screening process for a potential tenant and want to know how to order a credit report?

As a property manager, it’s your responsibility to properly screen potential tenants so that you can avoid accepting poor tenants.  Poor tenants may damage your property, or at the very least not pay the rent on time.   One of the processes in finding the most qualified renters for your properties is to order credit report as part of your screening process.

There are a lot of benefits with having a credit report to review for potential renter screening. A credit report will give you an information about a person’s credit history. Any history of non-payment of rent or any accounts in collections will commonly be disclosed and detailed in a credit report. Having detailed financial information on your prospective tenant allows you to have an idea if you could trust a potential tenant in paying their rent.

That’s why I want to take the time to tell you how to order credit report for your tenant screening.  

Things To Do When You Order Credit Report

A tenant submitted an application for the property they wish to rent.  Now what?  This is the best time to disclose and get the authorizations for a credit report.  Follow the simple steps below and you can easily order a credit report for a tenant:

1. Notify Potential Tenants That You Will Check Their Credit History.

The first step is disclosure in letting the tenant know you will require a credit report for applying and rental of your properties. You can disclose this procedure in writing or an easier way of disclosing the process is by indicating it in your rental ad. Letting potential renters know you will be running their credit to qualify for rentals can serve as a warning for them. People who have good credit will be confident enough to pursue their rental application. On the other hand, people who have poor credit score will tend to back out.

2. Ask Potential Tenants To Permit You To Order Credit Report.

In screening potential tenants, you should ask them to fill up a rental application form. To cover all legal aspects of running a prospective tenants credit you should include an authorization form.  You need their authorization to order credit report for the tenant. When they sign the authorization you are covered legally to order and review their credit for rental purposes. The authorization form and/or application form should ask for the following information from the potential tenant:

  • Legal name
  • Home addresses for the past two years
  • Social Security Number
  • Employer’s name
  • Phone number(s)
  • Drivers License or Govt ID

Getting the tenant to fill out and sign the application and credit authorization form is required legally to use their credit report in evaluating their rental status.

3. Charge Potential Tenants For The Cost Of The Credit Check.

The credit report and application screening process incur a fixed cost for your rental property business. For most states, it is normally legal for property managers to ask the potential tenant to shoulder the costs of running a credit check. The usual fee for one credit report that comes from one bureau can cost from $7 to $15. However, the more reliable and complete credit reports come from a combination report from all 3 of the major credit bureaus (Equifax, Experian, Transunion). The costs for a 3 credit report starts at $25 and goes up depending on the included background check items included with the reports. The additional staff cost of doing the tenant screening process can push your application fee with credit check to normally around $30 to $50. If a potential tenant is not willing to pay the fee, this should give you a sign that the person may not also be capable of paying monthly rental fees on time. Not completing the application process as required should be an automatically disqualify or exclude a prospective tenant from renting your properties.

4. Go Online To Order Credit Report.

Running a prospective tenants credit is easy to do online. There are three websites where you can order credit report online. You can either go to the Experian, TransUnion, or Equifax website. Feel free to check each website to find out which of them can give you the information that you’ll need. When you’re done deciding on the most suitable website for you, start looking for the link where you can order credit report. I would highly recommend signing up to do a 3-B report or three credit bureau report to make sure you have all of the financial data on prospective tenants available. The cost is higher but the benefit of having the extra information is priceless.

Doing credit reports is easy. You start by entering the tenant’s personal information, such as name, old address and Social Security number and any other information you received to identify the prospective tenant. It is up to you if you would like to order credit report from one credit bureau or all three. The online process requires a business or personal credit card to complete the payment.

5. View The Credit Report.

Credit reports are generated almost instantaneously. So after you enter the personal information from the tenant you will have a report to review!

To view the credit report of the potential tenant, click on the “Credit Score” tab at the credit bureaus website. When ordering a comprehensive credit report either from one agency or the 3-B you will be provided with an F.I.C.O. score for the tenant. The F.I.C.O. score is considered the credit score and can give you an idea about the creditworthiness of a tenant.  Normally, when a potential tenant has a credit score of above 650 or 700, the person is qualified to be a tenant. The score implies that the person is capable of paying the monthly rental fee. Sometimes a 650 or higher score is temporarily low because they are purchasing something or may have missed a payment in the past. You will have to decide the range of credit scores that qualify for rental of your properties.

6. Get A Copy Of The Credit Report.

When you are done viewing the credit report, don’t forget to print it. Having your own copy of the credit report will give you more time to evaluate the tenant based on the information that is disclosed in it. Read carefully through the tenant’s credit history and watch out for unpaid accounts.

A credit report can reveal if the potential tenant was capable of paying his bills on time. It can also show if the person is often applying for credit cards. Such information might be helpful for you in making a decision of accepting or declining the rental application of a potential tenant.

You need to check local and State laws regarding if you are able to give the tenant a copy of their credit report.

7. Inform The Potential Tenant Of Your Decision Regarding The Application.

A credit report is only one of the several reports that you should use in evaluating a potential tenant during the rental screening process. In addition to a credit report, you might run background checks reports for criminal records and to verify other items submitted by the prospective tenant. When you are done examining the different reports about a potential tenant, inform the person whether or not you will accept the rental application.

If you decided to decline the potential tenant because of some information that you found out in the credit report, you should speak to them directly or send a letter explaining the details why you decided to deny the rental application. You should also make sure to indicate what type of report you used in screening the tenant. Provide the person with a copy of the report if your local or State laws permit.  This will give the person an opportunity to check it for any inaccuracy.

Final Thoughts About How To Order Credit Report For A Tenant

We just talked about how to order credit report for your tenant screening process.  A credit report is useful for property managers in assessing a potential tenant. It contains information about a potential tenant’s credit history. It can also give you an idea of a tenant’s capability of paying the monthly rent.

I expect that this article gave you enough information about how to order a credit report for a potential tenant. If you have any questions and comments, leave them below.




Suggested Articles:
1. Why It Is Important To Check Credit Report?
2. How To Check Background For Property Managers
3. Understanding A Credit Rating Of Potential Tenants

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Article: How To Order Credit Report For A Tenant?

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