A guide on running a tenancy credit check
Investing in rental properties tends to cost lots of money, and if you are not careful, it may not pay off, because of having tenants that are not paying rent. Technology has made life easier by enabling landlords to screen their tenants.
If you are going to do tenant screening, you should follow the right steps to ensure that the credit check is transparent, and you do not find yourself on the wrong side of the law. If you want to carry out a tenant credit check here is a guide of some important things you should do;
Seek consent
You should never take a credit check of your tenant without consent. You can get written permission from the tenant’s signature in a document that clearly states that they agree with you taking a credit check.
You can also opt to contact an online company, and the company will send to the candidate a secure email, and the tenant can fill the form, and give an electronic signature; therefore, the company will have consent to do the credit check.
Some laws state that you should get consent for a credit check, and if you are opting to obtain written permission, you should seek legal counsel to get the right wording, because the terminology matters.
Tenant’s information you need
To get the credit check, the company you are using will require certain details that will help carry out the screening. The details are;
- Tenant’s legal name
- Addresses of the tenant for the last two years
- The tenant’s social security number
- The date of birth
- Current employer
- Current landlord
With the information above, you can comfortably get the tenant's credit history, so if you want to screen the tenant, you should ask him or her to provide the above details as accurately as possible.
Information you need to prove you are a landlord.
You also need to prove that you are a landlord so the company can allow you to access the credit’s history of the tenant, because it is sensitive information, and not everyone should access it. You need to have;
- A document that shows your current address
- A license/passport to verify your identity.
- A document that proves that you own a rental property.
It may take some time for approval, but after the permission has gone through, the check can take place in a matter of seconds.
Bonus tip; verify tenant’s information
Some tenants may not be truthful when disclosing their personal information that's why you need to take that extra step of ensuring that the information given is accurate to save time, and money. You should;
- Ask for the tenant’s license/passport/ identification to verify the legal name
- Call the employer to confirm that the tenant is one of the employees
Bottom Line
Carrying out tenant's credit checks is essential to get the right tenants who will pay the rent in a good time, therefore ensuring that you earn profit from your rental properties. There is information you require to get the credit check done, so get the relevant, accurate information.