As part of your tenant background checking process, you need to know how financially responsible your prospective tenant is. After all, you need to be sure the rent will be paid on time and that you don't have any financial headaches. How do I order a credit report for a tenant? is a critical question for a landlord or rental agent. You need to have the facts of tenant financial screening at your fingertips so that you can get off to a flying start.
Essential Information Needed for a Credit Report
You need a little information about your prospective tenant to run the credit check. At a minimum, you need the tenant’s name, current address, and either their Social Security number or ITIN (Individual Taxpayer Identification Number). When you have your prospective tenant fill out the application, don't forget to have a section that authorizes you to complete background and credit checks and gives details of any credit fee you plan to charge.
Where to Get a Credit Report
The easiest and quickest way to order a credit report is online. You can run credit reports online and receive them back very quickly to allow you to decide the best tenant for your property.
A popular choice is to get a tenant credit check via an online tenant screening service. Using a company such as Rentspree, you can request a credit and screening report from your tenant quickly and easily.
The online screening service contacts you when the report is ready to view and gives you a link to access it. Online tenant screening takes the worry out of ordering and receiving a credit report and is fast and stress-free for you and your applicant. Don’t spend time worrying ‘how do I order a credit report for a tenant?’ - do it the easy way!
Credit Check Fees
Check your state rules on charging prospective tenants for the cost of the credit report and administration fee, this process is legal in most states, but in some, the amount is capped. For example, California has a maximum charge and insists that the landlord provide an itemized receipt of any screening fees. Wherever you are, the credit check fee should reflect the actual cost of the check, usually between $30 - $50, and not be artificially inflated. It is against the law to accept a credit check fee and not use it for the stated purpose.
When you accept the credit check fee, be clear with your prospective tenants that it is not a deposit or guarantee that they will get the property. If you have a large number of applicants, you will save yourself time if you do an initial paper sift and only credit check the most suitable applicants. You need to weed out those who don't fulfill your criteria on pets or minimum income, so you don't waste time screening those who aren't a good fit for your property.
Should Tenants Provide Their Own Credit Report?
It is tricky for tenants who are applying for several properties, they will have to budget for more than one credit check fee. They may obtain their own credit report to share with prospective landlords and agents to avoid multiple sets of fees and try to give you that instead. In most states, it is up to your discretion whether you accept the applicant's copy of their credit report, but a reliable online tenant screening company can give you precise and up to date details. It is undoubtedly safer, to run a new report for each applicant so that you can ensure you have up to date information.
Decoding a Tenant’s Credit Report
A credit report is an excellent way of getting a good overview of your prospective tenant's financial background. You will be able to get all the relevant information on how they manage their money. You will be able to see if someone has ever filed for bankruptcy or is consistently late in paying bills or covering loans.
In many states, you will even get information on whether an applicant has been convicted of a crime, or even arrested, and if they are currently, or have been in the past, involved in a lawsuit so that you can be assured that they can pay the rent on your property. Information gleaned from credit reports gives accurate information on the financial history of the past 7-10 years.
When you're asking yourself, 'how do I order a credit report for a tenant?' You also need to ask how you understand and use that information.
The TransUnion Rentspree credit report gives you a comprehensive view of a tenant's credit history. You will have access to full credit reports and scores for each applicant, with details of payment histories and tradelines, which enable you to evaluate whether you can trust someone with your property.
When you run a credit report, you can use the objective data pulled from public records to give you a clear idea of how financially responsible your tenant will be. Using an online tenant screening service to order your applicant's credit report is a simple and secure process that protects both tenant, landlord, and agent.
You must be mindful of your responsibilities when ordering credit reports. You cannot use information gained in the credit report to discriminate against certain tenants by setting stricter standards for certain protected groups or ethnic minorities. The Disposal Rule federal law also requires that you keep only the particular information that you need from a credit report. You must discard financial data that is not necessary for you to decide who to rent your property to.
The Fair Credit Reporting Act (15 USC§§ 1681) requires you to give the name and address of the reporting agency if you decide not to rent to someone because of what you discover on a credit report. The Federal Trade Commission's website offers helpful tips on how landlords can use consumer reports.
By using an online tenant screening service such as RentSpree, you will get a full credit score and report for each applicant. The process is streamlined and the tenant pays the credit reports fees directly which is simple and secure. TransUnion Smartmove works with Rentspree to provide industry-leading data so you can make your decision with confidence.
When you’re wondering ‘how do I order a credit report for a tenant?’ Strongly consider going online. Using an online screening service means you won't have to worry over how to get a credit score for rental applicants in the future.