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Landlords can run tenant background checks to verify income, employment, rental history, and credit rating. Credit reporting agencies like Experian, Equifax, and TransUnion offer credit checks for a fee, while private companies offer subscription services. Poor rent history may not show up on credit reports, so talking to former landlords may be a better measure of rental history. Renter credit checks can assess a prospective tenant’s ability to pay bills and debt-to-income ratio, but these factors may not necessarily affect their ability to pay rent.
Landlords need to know that tenants will be responsible and pay their rent on time. For many landlords who rent, one of the best ways to do this is to run a tenant background check. With the prospective tenant’s permission, a landlord can verify such things as proof of income, employment history, rental history, and credit rating. Many landlords are able to do most of this check themselves, but may need more help when it comes to conducting a tenant credit check.
Your credit rating and any poor credit history are usually calculated by one of several credit reporting agencies. The most used in the United States are Experian, Equifax and TransUnion. These agencies offer owners the ability to credit check all three agencies for a combined score. This typically costs money, and the price varies depending on the agency that runs the check.
In addition to reports from credit reporting agencies, there are a number of private companies that can run credit checks through the various reporting bureaus. For landlords or real estate companies with many rental properties and the frequent need for new credit checks, some companies offer a subscription service that can reduce fees. Other landlords simply ask prospective tenants to pay a fee to check their credit. The latter method can be frustrating for those who have to pay this fee more than once if applying for several places to live, because many landlords won’t accept a credit report they haven’t initiated.
Those wishing to perform a renter credit check typically need to obtain signed authorization for credit checks to be performed. Companies that offer credit reporting services tend to require proof of such authorization. Landlords will also need to obtain the full names of those who will be responsible for paying the rent and the Social Security numbers of prospective tenants.
While agencies may pride themselves on their ability to make sure a tenant credit check checks for good rental history, this may not be something that shows up on a credit report. The only way poor rent history shows up in these reports is if landlords who haven’t been paid or not paid on time take action and report it to a credit bureau. This means that the average check may not tell much about the specifics of your rental history and past rental payments. A better measure of ability to pay rent may be to talk to former landlords to verify good rental history.
What a renter credit check can do is help a landlord determine if a prospective renter has a history of not paying other types of bills, such as utility bills or credit bills, or if they have bankruptcies within the past decade or other large bills. don’t pay. They can also assess your debt-to-income ratio. Again, these don’t necessarily affect a potential tenant’s ability to pay rent, and many people with large bills are quite capable of meeting their monthly rent payments.
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