Top Five Problems with Tenant Screening Services

Outsourcing the process of tenant evaluation and approval to one of the industry’s tenant screening services may be a smart way to provide consistent and reliable outcomes for rental applicants. However, all tenant screening services are not alike and some may have procedural problems that let an unreliable tenant slip through the cracks in their system. Here you’ll learn what to watch out for before you choose.

April 6, 2021

8 min read


Disclaimer: This article is not legal advice. Legal information is not the same as legal advice, where an attorney applies the law to your specific circumstances. Consult an attorney for advice on your interpretation of this information or its accuracy. You may not rely on this article as legal advice, nor as an endorsement of any particular legal understanding.

Determining how to move forward with tenant screening services can be an intimidating process. For property managers who are used to making decisions based on gut instinct, it can be difficult to put your trust in someone else’s process and procedures. More than that, with multiple options and providers available, it's hard to know who you can trust.

Now that you’ve decided that it’s time to conduct a tenant screening, the question becomes how does one identify the best tenant screening services? Don’t all screening companies promise pretty much the same thing? How can you tell a good service provider from a bad one?

The fact is, not all services are created equal, and some tenant screening companies have holes in their process that can make their assessments less than reliable. When their process is flawed, your process is flawed. The result of bad decision-making during the screening process can include:

  • Choosing unqualified renters, including those with a negative rental history.
  • Being in violation of Fair Credit Reporting regulations through improper disclosures or improper handling of documents.
  • Being accused of violations of Fair Housing Laws through inconsistent treatment of applicants.
  • Being left on your own without customer support or a coherent process for applicant screening.
  • Being left to answer tenant questions about a process you didn’t create or manage.

How can you tell the difference between an accurate, effective screening process and one that will let you down? We’ve compiled the top five problems with tenant screening services and the issues that can affect the accuracy of your report and undermine your ability to evaluate your new tenant.

1. Tenant Screening Services that are Solely Dependent Upon Tenant Involvement

The information for your screening process is primarily compiled by the person who is applying for your rental property. After all, you need them to provide their personal information in order to run the screening reports you’re relying on. How can you be sure that you’re getting the right information so that you can ensure accurate reporting?

There are a variety of ways in which your applicant’s information can be deemed unreliable:

  • Dates and addresses are misremembered.
  • Contact information for former employers and landlords has changed.
  • Requests for required elements end up in the applicant’s Spam folder.
  • Applicants have unreliable or unavailable internet access.
  • Applicants are unwilling or unable to supply required information.
  • Supporting documents are not submitted or are incomplete.

Whatever the case, making decisions based on partially completed information or losing days in the rental process while waiting for a completed application from a promising tenant makes the entire process less effective and efficient. Even a missing signature can mean the difference between a valid application and one whose terms are unenforceable.

2. Problems with Fair Credit Reporting and Compliance

The Fair Credit Reporting Act (FCRA) includes safeguards to help ensure that your applicant’s information is evaluated fairly and managed securely. In addition, it gives the applicant recourse to respond to negative information in their credit report in order to set into motion a dispute process and implement any needed corrections.

Unfortunately, some screening services do little or nothing to help you maintain compliance with the FCRA. They may base financial screening on credit score alone, providing no details or data to help you make or justify your decision. This keeps you from providing the legally required information to your applicants and sets you up for questions regarding Fair Housing and discrimination.

When you disclose your decision to an applicant, you are required to provide information to them upon request regarding the way in which you reached the decision. They are then able to approach the reporting agency to correct any errors or omissions on their financial report. An incomplete credit reporting process and an unresponsive screening service means that those frustrated applicants will be looking to you for answers.

According to the Fair Credit Reporting Act, a rejected applicant has the ability to seek damages from either the consumer reporting agency (in this case, the tenant screening service you choose) or the furnisher of information. That means you can be sued in state or federal court for violations of the FCRA. In order to limit your liability and head off any legal complications, it is vital that you work with a process that is proven and reliable.

3. Failure to Screen Co-applicants

You meet with a friendly, well-qualified applicant, send along the application information, and receive your report in return. Everything looks good and you move forward with the lease. However, you subsequently find that there are other people living in the property -- other people who were not included on the initial application.

Any adult living in your property, including spouses, significant others, and adult children, must be screened and evaluated in the same way in order to comply with the Fair Housing regulations. That means asking the same questions and requiring the same information and documents.

Moreover, having one unqualified tenant can mean that rent doesn’t get paid -- and without a properly conducted application and leasing process, you have no recourse against the person at fault. Whether purposely omitted or left off by accident, an incomplete application undermines your entire approval process.

It is essential that you use a screening service designed to facilitate the screening of everyone who’ll be living in the rental property. In addition, you’ll want a service designed to help protect all of the information it takes to run thorough background checks on multiple applicants.

4. Failure to Check Eviction and Employments Records

Statistics show that many tenants at risk for eviction have previously been evicted from another property. That makes the eviction check one of the most important factors in determining whether or not a tenant is a good risk. However, many screening services make eviction checks an add-on at additional cost to the applicant or offer it at a higher tier of service.

Along with an eviction check, your application should include needed information about the prospective tenant’s employment history, including current employer, dates of employment, salary information, and employment status. This, along with credit information, will tell you how stable the applicant’s financial picture is and how able he or she will be to pay rent each month.

Following up with employers and former landlords is a necessary step to ensure that you are getting accurate information about your applicant’s rental history, income, and job stability. A few minutes on the phone could save you months of frustration and thousands of dollars in lost revenue and legal fees.

5. Lack of Customer Service and Follow-up

There are two ways to run a tenant screening company -- as a service provider or as a tech company. It’s not hard to implement the tech side of the service -- create an API that runs the screens you need and automatically generates a report. What’s harder is providing client services after the screening.

When you make a decision about a potential renter based on the screening information from your service, you are responsible for disclosing how the information was gathered and used to reach that decision. A tech-only company won’t do anything to help you navigate the potentially tricky process of providing the report to your applicant and helping them correct any errors.

It’s important to ensure that you are working with a company that comes from a place of service and that understands the unique needs of real estate agents, property managers, and rental owners. Impeccable, 24/7 service ensures you never have to go it alone. Deep roots in the real estate industry help better predict your requirements so that you can do a better job for your clients.

How Rentspree Can Prevent Screening Problems

Now that you have a sense of the problems you might encounter with other screening services, it’s time to take a look at how RentSpree addresses each of these major roadblocks to a successful process. We’ve carefully evaluated the places within the screening system where things can go wrong and ensured that our service is comprehensive, coherent, and cohesive.

1. With our ApplyLink™, applicants are guided through a step-by-step process ensuring that your background check is based on the most complete possible information. Send the dedicated link or QR code via text message, email, or with a Screening Handout™ at your open house or private showing. You’ll stay updated with up-to-the-minute email notifications whenever someone submits a completed online rental application at the dedicated link. This streamlines your communications and helps you make better decisions more quickly.

2. Our TransUnion SmartMove renter credit report provides comprehensive data with leasing recommendations based on TransUnion’s decades of financial experience in the consumer reporting industry. Because it results in a soft-inquiry, Smart Move won’t have a negative impact on your applicant’s credit record; because it is formatted specifically for tenant screening, you’ll be able to better evaluate your potential renters.

3. Send ApplyLink™ to each of your applicants through separate email addresses. Because the process requires a completed file, you never have to worry about missing information, missing signatures, or incomplete applications. Stay in compliance with Fair Housing laws by asking for the same information, the same documentation, and following the same process for every applicant, every time.

4. Our fully detailed eviction report includes court records, tenant judgments, and writs and warrants of eviction. Never worry about technical jargon or codes; these simple, easy-to-read reports are designed to be user friendly. Reduce your risk of eviction by knowing the full rental history of every applicant. In fact, SmartMove is proven to be 15% better at predicting rental evictions and ensuring a more confident decision. Covering all fifty states and Washington DC, you’ll have the fullest possible picture of your potential tenant’s past behavior.

5. RentSpree provides a host of customer support options, including reference checks, renter support, and communications by phone, through email, or through Live Chat. We can even schedule in-person presentations to help you maximize the effectiveness of RentSpree’s services for your rental management. That kind of support before, during, and after the screening process gives you more peace of mind, and helps ensure that you always have help when you need it.

There are a variety of ways that other tenant screening processes can go wrong, from missed applications to missing information. RentSpree looks at all of the aspects of the application and approval process and finds the places where other services go wrong. That’s how we ensure a better process -- one that you can depend on to protect you, your investor clients, and your potential tenants. Now that you know some of the problems you might run into with tenant screening services, it’s time to look at how to help your new tenant feel right at home in your rental property.


Get thoughts, news, and tips sent straight to your inbox.
By subscribing, you confirm that you agree with our Terms and Conditions.