If you’re a landlord looking to screen potential tenants, one of the most crucial steps is obtaining a credit report. So how do you go about getting this important information?
First, you need to get the tenant’s written permission to run a credit check. This is a requirement under the Fair Credit Reporting Act (FCRA). Make sure the tenant understands that this check is part of the rental application process and that you need their consent to proceed.
Key Information Needed
Next, you’ll need some key information from the tenant. This includes their full legal name, social security number or ITIN (Individual Taxpayer Identification Number), date of birth, and residential addresses for at least the past two years. This information is typically gathered through a completed rental application.
Where to Get the Credit Report
You have several options for where to get the credit report. The most common ways are directly through one of the three major credit reporting bureaus: Equifax, Experian, and TransUnion. Alternatively, you can use a property management software platform like Avail or Zillow’s Rental Manager tools, which often partner with these credit bureaus to provide comprehensive reports.
Confirming Your Identity as Landlord
To run the credit check, you’ll need to confirm that you’re the actual landlord of the rental property. This might involve providing proof of residence, such as a mortgage statement or utility bill, and proof of identification like a driver’s license or passport.
Proceeding with the Credit Check
Once you’ve gathered all the necessary information and permissions, you can proceed with the credit check. You can choose to run the credit report on its own or as part of a bundled screening package that includes background checks and eviction history.
Services like Avail and Zillow’s Rental Manager allow you to request these reports and receive them directly through their platforms.
Reviewing the Credit Report
When the credit report is ready, it will provide you with detailed information such as the tenant’s credit score, seven-year payment history, collection records, total balance summary, and previous addresses and employers.
It’s important to review this information carefully, paying attention to factors like total debt, monthly payments, and any accounts in collections. These details give you a better idea of the tenant’s financial health and their ability to pay rent.
Verifying Tenant Information
Remember, it’s always a good idea to verify other aspects of the tenant’s application as well, such as their employment history and rental history by contacting their employer and previous landlords. This ensures that the information on the credit report aligns with the rest of the application.
Making Informed Decisions
By following these steps, you can ensure that you’re making an informed decision when selecting a tenant, reducing the risk of payment issues and fostering a positive landlord-tenant relationship.
