A background check is necessary for a landlord before renting out his property. This simple process can save you from potential risks. A background check is sufficient to reveal the problems and help you to identify a criminal. With the help of background information of tenant, you can make wise decisions and choose a decent person as your tenant. Here are some simple methods to check the background for tenants.
Collect Maximum Information from Tenants
You can get an application from a real estate association or download a sample online rental application. This application will help you to get the necessary information for background checking. A rental application must ask for:
- Full name of the applicant, date of birth, social security number, contact information, and the number of driving license (along with state of issue).
- Previous and current address, contact information, date of residence for former and current landlords
- Date of past and current employment, current income, contact information and name of former and current employers
- The contact information of three references
- Credit and banking references are necessary for credit checking
Personally, Interview Each Applicant
You have to interact with tenants frequently for different reasons, such as the payment of rent or to address maintenance concerns. You have to choose a respectful and friendly person so that you can comfortably interact with him/her. During an interview, you have to ask about the reason for leaving the old house.
Moreover, you must ask about pets, his/her smoking habits, number of people living in your property with this tenant, and the nature of the job. It is essential to ask about security deposit and monthly rent before he/she moves in your property.
Obtain Credit Reports
A credit report is necessary to identify the financial situation of your tenants. A credit report will give you particular information, such as evictions, illegal detainer lawsuits, bankruptcies, and foreclosures. Every credit company provides a credit score to demonstrate the financial reliability of an applicant. Your credit score must be more than 620 to rent an apartment.
You can obtain credit reports from credit reporting bureaus, such as Equifax, Experian, and TransUnion by setting an online account. If you deny an applicant because of negative comments on his/her credit report, you must send a letter of adverse action to this applicant.
It will tell your applicant the reason of rejection, address, and the name of an agency that provides negative information, and a right to obtain a free credit report from that particular agency within 60 days.
Background Check from a Certified Screening Company
The background checks will show several things like a criminal record, such as sex offender, violent behavior and patterns of making payments. This report will help you to understand whether this person will pay rent on time or can damage your property.
You can obtain a background report from an approved reporting agency of your state. The finance protection bureau may provide you a list of approved CRAs to screen your tenants. You have to pay some fee for this screening. You can request tenants to pay a fee for an application to cover the cost of credit and background checks. It will be good to talk to their previous landlords to know about their behavior toward property and rent payment.