Landlord Credit Reports & Tenant Screening

Landlord Credit Reports & Tenant Screening

Tenant Screening is a great tool for landlords and property managers to reduce the risk of property damage and eviction proceedings by running complete tenant background checks before signing lease contracts. Tenant screening reports can provide landlords with credit reports, criminal records, eviction records and previous landlord reference checks. This information allows the landlord or property manager to make an informed decision before allowing an applicant to rent property.

Rent to income ratio is an important consideration when it comes to renting out property. 25% of renters spend 50% or more of their income on rent according to a 2015 survey. When renters spend more than 30% of their income on rent, they are more likely to have eviction proceedings filed against them than those who spend less. When running credit reports on prospective renters, it is important to consider the rent to income ratio before making a rental decision. A RedFin survey concluded that 2.7 million people faced eviction in 2015 and those are just the ones that went through court-filed eviction proceedings. Rental prices have gone up 66% since 2000 and the median income of renters has only increased 35% resulting in evictions of people that could previously afford their rental payment, but can no longer do so.

A recent TransUnion survey found that the average eviction proceeding costs a landlord $3,500 per case and can take 3-4 weeks to complete. This is very high cost to landlords, especially those that aren’t large commercial property owners. Running tenant background checks is a way to make sure that only credit worthy renters are allowed to rent property and help avoid these proceedings.

Eviction records along with credit reports and criminal background checks can provide landlords with a better understanding of a prospective tenant’s likelihood to be evicted again. Tenants that have been evicted previously are 3 times more likely to be evicted again.

Tenant Screening Articles

• 5 Things to do before renting out your house
• Eviction Records
• What to expect from "free" background check sites
• Landlords & Property Managers: Using Credit Reports
The Importance of Landlord Credit Checks & Tenant Screening
• Major Credit Bureaus Removing Tax Liens from Credit Reports
• How far back does a criminal record check go?
• Online Background Checks - Do Online Databases Provide Accurate Information?
• How can a candidate's current or past income be verified if the employer won't release salary information?
• Background Checks & Social Media - Using Court Records & not Search Engines or Social Media.
• Key Differences between In-House and Outsourced Background Checks
• Restore your credit rating

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