How to Run Credit Checks on Prospective Tenants

Find out about the financial responsibility and history of prospective tenants by running credit checks on rental applicants. Follow these few steps to look into your potential tenants' financial history.

Difficulty: Moderate

Instructions

Things You'll Need:

• Financial Calculator
• Credit Reports
• Rental Applications
• Notebooks
• Personal Organizers
• Writing Pens
• Notebooks

1. Require prospective tenants to complete written rental applications with their credit history, employment status and names of former landlords.

2. Consider charging rental application fees to cover the costs of running credit checks on prospective tenants.

3. Verify the applicant's employment status and bank information by contacting employers and financial institutions.

4. Contact former landlords to check on the applicant's payment record as a tenant.

5. Order credit reports on applicants from a major credit reporting company such as Equifax or Trans Union to verify their credit history and possible evictions or convictions.

6. Contact an agency that specializes in screening tenants, such as National Tenant Network, to receive reports on the applicant's payment history as a tenant.

Tips & Warnings

• A prospective tenant's credit history is a good indication of future ability to assume financial responsibility.
• Avoid discrimination complaints by selecting applicants based on their financial history rather than gender, race or other discriminatory factors.

[farmgirl1961]

on 3/31/2009 We have found that a reasonable fee to check credit/criminal records is a good way to screen out bad renters. If someone isn't willing to pay a reasonable fee, they may very likely know that they won't qualify anyway. Landlords have to pay for the reports and must pass along the cost to the potential renter. Landlords can't afford to run credit/criminal reports on all those who will do it if it is FREE and take their chances.

[girlpower973]

on 12/3/2007 This article is incorrect. Trans Union and Equifax do not offer credit report checks for landlords. You have to be a big rental agency and pay big bucks for their services. You cannot just pay a flat fee to run a report.

on 2/22/2006 Although receiving the credit report from a potential tenant reduces costs to both landlord and tenant, be wary that the report may be forged or outdated.

on 1/16/2006 In many states people can get free credit reports. If the tenant supplies the credit report, it does not cost him any money. This is a win-win for both tenant and landlord: The landlord gets the credit report and the tenant does not have to pay for it.

on 11/22/2005 Offer to refund their application fee if they are approved for the lease - that way everyone's happy.