Many real estate professionals believe that a social security number is needed to verify information on an apartment rental application. However, today that isn’t necessary. In fact, it may be illegal in some states (such as California) to reject a rental applicant because they do not have a social security or do not wish to give that number to you. If you do request a social security number on an apartment rental application, make sure you are consistent in your screening efforts by screening ALL applicants the same way. You cannot selectively screen one applicant this way and not do so to other applicants. That could be an FHA violation.
This article goes over the best way you can generate screening reports on an applicant without needing to collect a social security number from the applicant yourself.
Why Do Landlords and Agents Think a Social Security Number is Required for Screening?
Many landlords, owners, and agents hold the belief that a social security number is required on an apartment rental application in order to access screening reports. The reason for this belief stems from the past.
Don’t worry, we won’t delve into a detailed history lesson. But back in the day, when technology was in an earlier stage, landlords and agents had no other method to access screening reports other than collecting the applicant’s SSN. With the SSN in tow, real estate professionals would need to send in the applicant’s information to the screening company (usually via fax or mail).
The screening company would then use the tenant’s information to generate screening reports and provide them to the landlord/agent.
As you will see, it is no longer necessary for the real estate professional to collect and transfer the tenant’s social security number in order to access screening reports. Technology has streamlined this process.
All You Need to Successfully Screen a Prospective Tenant
The good news is that you do not need an SSN on an apartment rental application to screen a prospective tenant. Technology allows the applicant to provide their social security number and authorize their screening reports directly with the screening company. You can then receive instant access to any screening reports. That means you no longer must needlessly handle and transfer sensitive information. All you’ll need is the applicant’s contact information (email address) to send the applicant an invitation to authorize his or her screening reports.
Getting Screening Reports without a Social Security Number on Apartment Rental Applications
Many real estate professionals wonder how they can view a prospective tenant’s credit report without collecting a social security number. Checking an applicant’s credit is crucial in the tenant screening process. The reason is credit reports are a treasure trove of information about the applicant’s finances. Most credit reports include the person’s credit score, identifications, credit inquiries, trade lines, payment history, collections, and public records.
The three credit bureaus ask for a social security number to search for a person's credit score and history. As mentioned, using technology, applicants can provide their SSNs directly to the screening company. But what if the applicant doesn’t even have an SSN? There may be another way to access screening reports.
Individual Tax Identification Number (ITIN)
Some credit bureaus have improved matching ability and can use an ITIN number to generate screening reports. This opens up the possibilities for countless applicants who may not have a social security number yet. But what is an ITIN?
ITINs are issued for tax purposes. When someone who is not eligible for a social security number works, they need an ITIN to pay taxes on the income they receive. The IRS grants these individuals ITINs. Both the social security number and ITIN number have nine digits.
What if your applicant does not have a social security number?
You can check with your tenant screening provided can generate screening reports using an ITIN. If it’s still not possible, you can still thoroughly screen a prospective tenant using alternative means. These are some common alternative methods of screening an applicant’s financial history without using an SSN or ITIN.
- Ask for proof of income
- Ask for bank statements
- Ask for tax returns
Why Collecting a Social Security Number on an Apartment Rental Application Can Hurt You
Due to the fact that you really don’t need to collect an applicant’s social security number in order to access screening reports, you should think twice before asking for it. This is some of the most sensitive personal information out there. There are certain risks and responsibilities that go along with storing this kind of information. If you still want to collect an SSN, you should avoid the following poor practices:
Unsecured Records Storage
The unsecured practices of printing off documentation bearing social security numbers and improper disposal of such documents is a major cause of identity theft. Today, identity theft is a real and pervasive problem in the United States. The protection of private and financial information is critical for real estate professionals and tenant screening companies. The trust of your clients and applicants lies in your hands. That's a heavy responsibility, so safeguarding that information is essential.
When you choose to go it alone and handle sensitive documents that contain financial information and social security numbers, you’re taking on a legally sensitive role and responsibility. That’s why it’s important to store these documents with social security numbers in a secure and locked environment.
Owning an industrial strength shredder is a must if you plan to collect paper applications bearing social security numbers. It’s a good idea to immediately shred these documents after their purpose has expired. Also, be careful not to keep unsecured PDF copies of documents that contain socia security numbers. Computers, tablets, and cell phones can be easily hacked, so irresponsibly storing such electronic files on a device is not wise.
Mishandling SSN Documents
It's easy to understand a prospective tenant's hesitancy to hand over their social security number to a stranger. Not only does it heighten the applicant's risk of identity theft, but also it increases the landlord's liability should they mishandle the social security number documentation. For instance, sometimes landlords make the mistake of repeatedly running an applicant's credit score which could cause an applicant's credit score to plummet. This is an example of mishandling a social security number by a real estate professional. It may be unintentional, but the repercussions of a mistake like this can be devastating to the individual affected. As a result, the real estate professional or landlord that damaged the person's credit could be held liable for doing so.
Times have changed in tenant screening practices. Technological advances and new tools allow real estate professionals to conduct thorough searches on applicants without the antiquated practice of requesting social security numbers on an apartment rental application. You can reduce your liability and time by using an online tenant screening service like RentSpree that allows applicants to input their most sensitive directly, so you don’t have to touch it.
If you choose to conduct tenant screening ”the old way” by collecting social security numbers, please take into account the extra risks involved.