“A Property Manager’s Guide To Understanding A Tenant Verification Service” written by Mike Marko
Do you know how a tenant verification service can help property managers?
A tenant verification service can specifically help a property manager during the tenant screening process. This service will help them do a background check on tenants. But what exactly does a tenant verification service do?
I’m going to cover that and more in today’s blog post. By the end, you’ll have a sound understand about how you can benefit from a tenant verification service.
Using A Tenant Verification Service When Screening Tenants
Screening tenants is a tedious and time-consuming task for property managers and landlords. Tenant screening becomes a huge job for property management companies. There are a lot of things to consider and check when interested applicants apply. When tenants applications pile up, property managers cannot just neglect some parts of the process during a tenant screening to speed things up.
The solution to helping with the tenant screening process without adding more staff and resources is to hire an outside or online tenant verification service and/or screening agency to assist you to help minimize your workload.
Before I share with you why a tenant verification service can be a great help to you, let’s first tackle what a Tenant Verification Service is all about.
What Is A Tenant Verification Service
The tenant verification service (TVS) is a type of company that does credit reporting and tenant screening processes and the main purpose of the service is to serve the needs of the residential rental industry. Most TVS type companies provide fraud prevention tools, credit tools, background check tools, for your tenant screening. Their primary goal is to help you to better target delinquent tenants to eliminate as potential renters for your property.
Tenant verification service type of agency will obtain a tenant credit report for you. Normally this credit report will also include a FICO score. TVS helps landlords and property managers to prevent fraud through their operating instructions and landlord guide, tools that can assist you in your tenant screening.
TVS will help you reduce the risk of income loss brought by delinquent tenants through their tenant screening service. Most TVS companies must include a Notice to Tenant in their service which is an impact statement alerting them that they are being background checked for tenant screening processes. Additionally if requested by tenants being screened the notice will show the consequences of leaving a landlord or property manager with unpaid rent and/or damages to the property.
Why Use A Tenant Verification Service For Your Tenant Screening Process
A good tenant verification service will help you as a property manager to prevent any kind of fraud and reduce income loss effectively through their tenant screening service. Most tenant verification services use your applicant’s Social Security Number, the applicant’s identity will be validated on the credit report that the agency has obtained for you. In this process, you will easily know if your applicant has provided false information.
Tenant verification services will provide you a complete credit report where it includes a current & previous address, current & previous employer, liens, collections, civil judgments, and bankruptcies.
Some tenant verification services will provide you access to their Credit Grantor information. This type of information is where the accounts are rated 1 to 9, where 1 is considered being the best rating. Having a rating of 1 indicates that the account is paid on time. A rating of 9 is considered being the worst. This indicates that it is highly likely that the account was closed by the Credit Grantor.
Tenant verification services also allow landlords and property managers to find out past history or rentals, evictions and will provide reports on tenant’s credit history and tenancy if they have had delinquent or late pay habits. Doing so will be beneficial for good tenants and will negatively impact tenants who can’t pay the rent on time and may as well be considered as delinquent.
How A Tenant Verification Service Can Help You
Using a tenant verification service can help you in many ways. Tenant verification services online most commonly compile and report using USA tenant screening websites and credit screening companies.
Here’s what you need to know about the services you need to choose when selecting a tenant verification service and how they can further assist you.
Tenant Credit Checks
A credit check is one of the most important aspects of doing a background search. Credit checks can determine the applicant’s creditworthiness using reports to show historically how that possible tenant has paid their bills and credit obligations. It can also help determine how truthful is the applicant’s information.
Credit checks are key to minimizing the risk of rental income loss as if someone is always late on paying bills they will most likely be late paying rents. Or likewise, if someone is excellent credit and pays all bills and obligations on time they will most likely pay rents on time without issues. Without a credit check, it is almost impossible in determining the payment habits of an applicant…
Registered Sex Offender Search
Another service offered by many tenant verification services is nationwide criminal record search where a national registered sex offender search is included. Knowing your possible tenant is a criminal or sexual offender can become a liability issue for the property manager if a sex offender obtains tenancy then commits a criminal sexual act.
Having a registered sex offender search can help keep the property manager’s rental community safe. The search will help you avoid accepting tenants who are sex offenders.
Criminal Record Checks
Another important tenant verification service tool is having criminal record checks in your background search can help minimize the risk of renting to criminal. Making sure you know who you are renting to and if they have criminal tendencies will help you avoid any negative impact on your rental community, your neighbors, and also yourself. As a property manager, it’s your sole responsibility to keep a safe rental community for all your tenants.
Eviction Record Search
Another important tenant verification service to consider doing is conducting an eviction record search on your applying applicants. Finding out if the applicant has been evicted from a previous property can help you minimize the risk of renting to a high-risk tenant. If the tenant already had an eviction this means that the tenant most likely missed paying the rent in the past. Having this as part of your background check will help you thoroughly check for delinquent tenants.
But keep in mind that eviction records are not always 100% correct. Sometimes landlord or property manager’s will not report any evictions or late rent payments. In this case, due diligence is required. Contacting current and previous landlords can help determine what the tenant pay habits were like.
Address Verification Search
An address verification search can help in validating what is in your applicant’s rental application. Some tenants may not include addresses where they got evicted. But with an address verification search, it can help determine the truthfulness of the rental application.
Although some credit reports provide a list of previous addresses, the address verification search can be much more thorough. Having this as part of your background check can help you pick the best tenant. The search may go back 20 years in some instances.
Tenant screening is a necessary part of determining whether your prospective tenant has a good rental history or not. The process of screening tenants can also be called a renter background check and a tenant background check.
Your tenant screening should have an established credit history and tenant history in order to minimize the risk of accepting delinquent tenants. If you don’t have a tenant screening process, then you may be inviting potential problems into your business.
Tenant Pay Habit Reporting
A tenant verification service may offer to report of rent payments as part of their service. Once an applicant has been accepted, a property manager can use the service to receive and report the tenant’s payment habit. This is likely the single most effective way of making sure that the tenant will pay the rent on time.
When you have the information about a tenant’s rental payment habits you can see if there are any changes in the payment trend (i.e. maybe foresee if the tenant is approaching hardship), or identify your best tenants. That way you can work to retain your best tenants, and determine how to handle your less desirable tenants.
Final Thoughts On Using A Tenant Verification Service When Screening Tenants
In this article, we talked about how a tenant verification service is a credit reporting agency that helps landlords and property managers. Their main purpose is to make sure that you do not accept delinquent tenants which are the main reason for income loss. We also covered other services provided by the tenant verification service.
A good tenant verification service provides a full credit report to its users along with a FICO score. The agency offers a lot of services, from credit checks to reporting payment habits, all of which can further help landlords and property managers determine which applying tenant to accept and reject.
Please comment below with any questions or thoughts you may have about the tenant verification service.
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