“Key Reminders For An Effective Tenant Background Check” written by Mike Marko
Do you want to know how you can do a tenant background check as a landlord?
If your answer to that is a yes… then you should read further!
It is important for landowners to fully know who their tenants are… right?
You want to make sure you are not bringing in someone who won’t do well for you or your business. I believe nobody wants that even in other businesses.
Good thing you’re in the right place.
Let me tell you some ways on what you should do. Here are some important reminders that I can share with you for your tenant background check.
Ways to Do for Tenant Background Check
Remember that you can do more than one way of doing a background check for your future tenants. Make sure you double check their identity and background.
Developing an effective tenant background check and tenant screening process is key to finding the most qualified renters and protecting the rental property from damage and unpaid rents.
Now let’s roll up our sleeves and get into the details of a tenant background check.
The first part of the tenant background check is finding a renter who is looking to rent a vacant property you have for rental. If the renter does well in the interview and showing of the property processes, the next step is to get a signed application with other signed authorizations to complete the tenant background check process.
Many property management firms and landlords require potential tenants to fill out this form. A complete application will help you assess if you are welcoming a good tenant in your property.
The rental application form must have all the basic information you will need. Make sure that the potential tenant will provide his government identification numbers (ie driver’s license, green card or other identifying documents).
Your rental application can also ask your potential tenant to provide the following:
- Social security number
- Driver’s license
- Addresses and contact number of previous landlords
- Bank account numbers (for credit checking)
- Lifestyle information (if the tenant has a pet)
- Current and previous employers’ information (contact numbers and addresses)
- Current income
In almost all cases, property management forms and landlords will require authorizations to run possible renter’s credit. To make the process run smoothly, you should provide an authorization form for your possible tenant to sign with the rental application. This form indicates that the tenant is allowing you to do a tenant background check for his bank account, credit score and complete credit check.
It is under Section 604 of the Fair Credit Reporting Act (FCRA) where landlords are required to ask potential tenants for permission to run a credit check.
Three companies TransUnion, Experian and Equifax are the three major crediting bureaus that do a credit check for your tenant.
Log in to their website and ask for a tenant credit check. If you don’t have an account yet, sign up to these websites individually.
It will be very helpful for you if you are planning to do multiple tenant credit checks.
Once this is completed, you can now start performing a credit check to your tenant.
Performing a Tenant Background Check
This step can be done on your own or you may ask a company who specializes in doing a tenant background check.
Companies will offer their services for a fee depending on the thoroughness of the report that you want. This includes information like, criminal records, eviction histories, and credit history. I recommend using an inexpensive scoring company like Top1Score because you can get a quick determination of whether the applicant is good or not.
You can also start contacting previous employers and landlords of your potential tenant. This will help you verify information that your tenant provided. Whether all details are correct and the tenant will do well for you and your property.
Ask them questions like:
- How long did they stay in their property?
- Were there any complaint from neighbors?
- Did they pay the rent on time?
- Would you rent to them again?
For the employment check, you can ask the past employers what the tenant was like when he was their employee. You may also want to know if he voluntarily resigned or got fired from that job.
Contact the tenant’s current employer and ask about the potential tenant’s income. Check with the employer whether all the details that your potential tenant provided are all true.
Schedule an Interview
If your potential tenant has been thoroughly checked and no errors were found, you may call your potential tenant to schedule an interview.
In the interview, ask the tenant the some of the same questions on the rental application form… to make sure your tenant knows what he really wrote on it.
When conducting the interview, you need to be careful about what you ask. That’s because tenant rights are protected by the Fair Housing Act.
Fair Housing Act
Do you know about the Fair Housing Act?
As a landlord, it is important that you will not discriminate on your tenants whether by race, culture, religion, gender, disability, or age.
You can also interview the tenant about his lifestyle.
This includes but not limited to:
- Pets – How many? Will they be cages or housebroken?
- Possible roommate
- Work schedule – Day shift? Night shift?
- Habits – Smoking? Drinking?
- Relatives – Will they spend some time in your place?
- Vehicles – Car? Bicycle?
Rejecting A Rental Applicant
If it happens that your potential tenant is not good for you then you must inform your applicant either by email, a letter or through a phone call.
Indicate why you decided to deny or rejected his application. Add also the name and the address of the company or companies who run the background check and credit check of the tenant. The tenant also has the right to have a copy of the negative information that was given to you by the company who did the tenant background check.
Final Thoughts For An Effective Tenant Background Check
As we discussed, there are a lot of ways that you can do a tenant background check. While you hire a company to do the job you can also do your own background check by contacting references of your tenant.
Just remember that I discussed the different things you need to provide to your tenant before starting to do a background check.
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