Sample Credit Report

“Sample Credit Report” written by Mike Marko

Are you looking for a sample credit report?

Before approving your upcoming tenant’s rental application, it is advisable to conduct a background check first. The process of background checking will eliminate frauds or bad tenants from renting your property.

Usually, bad tenants have a habit of not paying their bills on time. Unpaid bills will surely have a negative effect on your financial status and that is one of the reasons why you need to acquire a credit report from every applying tenant.

A credit report is a detailed log of the applying tenant’s credit history. Typically, it is one of the most important factors used in determining the applicant’s ability to be a good tenant. Through the credit report, you could determine if the applicant was financially capable of paying monthly rent.

If you have no idea about the details that you can see in a credit report, take a time to read this article and know every detail you can find in a sample credit report provided at the end of this article.

Breaking Down A Sample Credit Report

Credit reports usually contain the applicant’s name, current and previous address, Social Security numbers and employment history. Most importantly, credit reports have the applicant’s précised credit history, number and type of accounts and credit limits. Usually, credit reports retain every negative item for the past 7 years while bankruptcy filings stay on the credit report for at least 10 years.

Information You Can Find In A Sample Credit Report

A sample credit report below is divided into three sections. The first section is about the basic information about the applicant. The second section includes information about the person’s credit lines or trade lines. Lastly, the third section includes the individual’s public records including bankruptcies, judgments, and tax liens. The bottom part is a list of individuals who requested the credit report.

Personal Information

The first section of a credit report shows the personal information of a tenant.

The personal information section will tell you about the tenant’s legal name, current and previous addresses, current and past employers, and date of birth. This section can be used to verify the basic information that your applying tenant provided in the rental application.

Merchant Trade Lines

This section provides information about the applying tenant’s regular credit lines such as department store cards, auto loans, mortgages, and credit cards.

You should not consider an applicant if there is a history of late payments in the credit lines, or if the trade lines became bankrupt, charged off, or put into repossession. There’s a big possibility that the tenant is not financially capable of paying rent on time.

Collection Accounts

Either because of delinquency or because of a bad check, a collection account will appear on the credit report. Usually, late payments can cause collection accounts.

Public Records

Public records will include bankruptcies, judgments, liens, divorce, satisfied judgments, and satisfied liens. Whatever the court record is, even if it is satisfaction, many landlords still consider it negative. Public records remain on a credit report for 7 to 10 years.

Credit Inquiries

The name of the company that requested the credit history will appear on credit inquiries. There are two types of credit inquiries, “hard inquiries” and “soft inquiries”. Usually, the hard inquiries affect the FICO scores.

Common Reasons Why Credit Reports Are Requested

A credit report is required if a person submitted an application for credit, insurance policy, and rental property. Legally accepted individuals such as creditors, insurers, and property managers are allowed to acquire an applicant’s credit report. Employers are also allowed to request their worker’s credit report as long as both sides have settled an agreement.

Requesting a copy of a credit report cost some money, the person who requested the copy will have to pay the credit bureaus.

Credit Bureaus

Credit bureaus usually help lending institutions in evaluating an applicant. Most of their clients include banks, mortgage lenders, credit card companies and other financing companies.

Free Credit Reports

According to The Fair Credit Reporting Act, each one of the three credit bureaus is required to give a free credit report once a year. However, the process will take at least 60 days. Individuals who are unemployed and victims of identity theft are allowed to get a free credit report.

Final Thoughts About Sample Credit Report

I summarized and included all the important things you need to learn about a sample credit report because I know that the sections of the report might be difficult to understand.

That’s it. I hope that the sample credit report provided in this article helped you to be familiar with a credit report.

As a property manager, you have the right to request a credit report of your upcoming tenants. Learning its importance will surely help you especially if your tenant screening is not assisted by screening companies.

If you have questions and suggestions, feel free to leave them in the comment box below.

 

 

Suggested Articles:
1. Property Manager’s Guide In Creating A Tenancy Agreement
2. How To Determine The Best Tenant Background Search
3. Know When To Hire A Landlord Tenant Lawyer

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Article: Sample Credit Report

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