Whether you're a property owner or managing a property for someone else, it's important to protect that property by carrying out thorough credit and background checks on any prospective tenants. That way, you can identify those individuals whose criminal record, record of evictions or history of not paying rent on time make them unacceptable risks. All landlords are allowed to carry out background checks and review credit records when they want to screen applicants. It's important to note that this has to be done properly. If you're uncertain about this, you might want to hire a professional tenant screening company to carry out all or part of these checks for you. In particular, you might want them to look into the applicant's criminal record.
Step 1. Provide a detailed application form for all potential tenants to fill out. The information you get on this form is essential for conducting a credit and background check, so it needs to be as detailed as possible. You'll want information like the applicant's contact details, Social Security number, driver's license, bank account numbers (for conducting a credit check), as well as the addresses and names of any previous or current employers or landlords.
Step 2. The law requires that before any landlord conducts a credit check, that landlord has to get written permission from the prospective tenant. This is why you need to include an authorization form for a credit check with your rental application. Should the applicant refused to sign this form, you can in turn reject the rental application.
Step 3. You should run the credit check through credit agencies. The reports you get back will provide you with information about the applicant's general credit history, including any bankruptcies, foreclosures, evictions and other occurrences that impacted their credit. You will also get a credit score that evaluates the overall financial reliability of the individual.
Step 4. A review of the applicant's criminal history is essential. In order to have this professionally done, it's best to hire a tenant screening service to carry out this particular type of check. The company you hire should examine both the national and local criminal reports, as well as the sex offender database. They should also do prior address verification.
Step 5. Don't forget to call the applicant's previous and current landlords. You not only want references, you'll want to ensure that all the information you were provided with is actually true. Finally, you should contact the applicant's current employer in order to confirm both employment and the amount of the monthly income listed on the application.
Two Rivers Investment is a tenant service you can contact for more details.