How to Do Credit Checks on Potential Tenants

Home owners have little protection when becoming a landlord. It is up to you to try and minimize the chance that your property will be damaged or you won't get paid your rent. In order to evaluate a potential renter for risk it's important to do a credit check. Avoid any legal complications by doing it correctly and you'll be in good shape to choose a tenant that you can rely on. Read on to learn how to do credit checks on potential tenants.

Instructions

1. Have the potential tenant fill out a written application that includes full name, previous names as well as date of birth and previous addresses. Ask for credit references as well. In the event that you have disgruntled, rejected applicants, you will have a paper trail to present for litigation.

2. Contact a credit agency from your local phone book or online. They will use one or all three of the bureaus to pull a score. This is a cost you may want to pass on to the renter, especially if you have a lot of units to sublet.

3. Evaluate any late payments or collections to determine whether or not they pay their bills. Match up the addresses with those they provided to see if they are accurate on the application.

4. Ask renter's who don't have any credit to provide letters from previous landlord's, utility companies or employers. If they are new to the country, this will be a common way to check their credit.