There is a lot of confusion floating around about the idea of a credit report for landlords. For instance, some believe that you can’t obtain a tenant credit check due to privacy laws. That isn’t the case. It is true that you must have a “permissible reason” (according to the FTC) to obtain a credit report. It just so happens that someone wishing to rent your property qualifies as a permissible reason to run a tenant credit check. Below are a few other facts and details landlords need to know about tenant screening that go beyond a tenant rental credit check.
What Can You Learn from a Credit Check for Tenants?
Depending on where you obtain your landlord credit report, you will learn different things about your prospective tenants. For instance, Landlord Credit Bureau uses Equifax credit reports that may reveal the following:
– Credit Score
– Current and former addresses
– Employment confirmation
– Credit history (tradelines)
– Credit Balances
Some Landlord Credit Bureau landlord credit check options may reveal previous rental histories for tenants who have opted in and consented to have their rental information reported on their credit reports.
Is a Landlord Credit Check Necessary?
In a perfect world, all tenants would pay their rent on time, behave professionally, and not destroy your property, forcing an eviction, etc. Credit checks do more than reveal whether a prospective tenant will pay the monthly rent on time, though. They also serve as a second line of identity verification to help ensure the tenant is who he or she claims to be. Make sure to ask for a photo ID to verify the information on the application and to get consent from the tenant to run a credit check.
The credit check is about protecting you from potentially “bad” tenants who may cost you months of lost rent, damage your property, and more. You especially want to know about those who have serial evictions. While bad things can happen to anyone (lost job, lengthy illnesses, etc.), serial evictions are a sign of continuous problems you might want to avoid with your rental properties.
Landlord Credit Bureau believes that a tenant credit check with information from Equifax is one of the most important things a landlord can do to protect his or her financial and personal interests in a property. But it is important to remember that credit histories and reports aren’t the entire stories about anyone. They only offer snapshots of time.
What are Red Flags to Look for on a Credit Report?
Once you have the credit report in hand, there are certain things you’ll want to be on the lookout for. These things include:
– A long history of late payments.
– Charge-offs and unpaid accounts.
– Eviction history, especially if there are multiple evictions in the history.
– A large amount of debt for a prospective renter.
– Recent bankruptcies.
In light of the recent pandemic, some things, like a recent bankruptcy or a few slow payments (especially those that occurred in April and May of 2020) can be explained by the unexpected nature of the shutdown and immediate loss of income so many across the country experienced.
About Landlord Credit Bureau
Landlord Credit Bureau’s mission is to empower the businesses and lives of landlords and property managers while enriching the lives of responsible tenants.
LCB provides the means and tools to secure better renters, reduce the frequency and impact of delinquencies and drive operating efficiencies while providing tenants – seeking to establish, or rebuild credit – with a liberating way to improve their credit.
In doing so, Landlord Credit Bureau enables landlords to increase revenue and profit while decreasing the time it takes for responsible tenants to unlock and access future credit-related rewards for themselves and their loved ones.
For more information, visit: https://landlordcreditbureau.ca/