To safeguard your interests and protect your property, it’s critically important to carry out complete background check for renters and consequently qualify only the ones who are least likely to cause problems. This is the most effective method of identifying and disqualifying prospective tenants who have been evicted from their previous properties, have a criminal record, or a reputation of not paying rent.
So, what steps should you follow to conduct background check for renters?
Fill Application Forms
To effectively capture all the required information for background checks, request all your prospective tenants to fill formal rental application forms. Some of the information they should individually fill in include contact information, bank account numbers, driver’s license number, social security number, past landlord and employers, employment information, and more. The broader the information, the more comprehensive your qualification process will be. If any of your applicants decline to willingly give out any information, it should be interpreted as a red flag- subsequently disqualifying him/her.
Include Credit Report Authorization
Section 604 of the Fair Credit Reporting Act requires you, as a property manager or landlord, to request for permission from an applicant before conducting a credit check. You should therefore include this form along with your tenancy application form.
Conduct a Credit Check
Using the information submitted to you through the credit report authorization form, run credit checks on your individual applicants through all the three primary credit reporting bureaus- Equifax, Experian and TransUnion. They will get back to you with comprehensive information that’s relevant to your respective tenants’ credit histories- evictions, lawsuits, bankruptcies, foreclosures, and other critical credit-related records. Additionally, you’ll get your applicants’ individual credit scores and subsequently use them to make informed judgments on their respective financial reliability. Generally, the higher the score, the lesser the risks of future defaulted rent payments.
Hire a Tenant Screening Company
Although you can do it yourself, it’s more advisable to hire a tenant screening company to conduct a thorough background check on your prospective tenants. In addition to verifying details submitted by an applicant, a standard background check will go through sex offender databases plus state and national criminal reports to establish if one is of good character or not.
Contact Employers and Past Landlords
Finally, contact your applicants’ respective employers to verify their employment details and learn more about their characters and behaviors. Additionally, consult past landlords and seek details on the applicants’ past relationships with their respective landlords. If you’re satisfied, get in touch with all applicants to inform the disqualified ones the reasons for their dismissal, and subsequently congratulate the most qualified individual.