What will I not learn from a tenant credit report?
When you do a tenant credit report you can expect to know if the applicant generally pays their credit cards/loans on time. It also tells you approximately how much credit debt they are in and if there are any collection or judgments against them. In general, tenant credit report tell you if the person is financially responsible when it comes to their credit debt. For this reason, a tenant credit check is probably one of the most important and essential tools when screening a tenant. BUT…..
A tenant credit report will not tell you if the applicant has ever been evicted from a previous residence or if he or she was a problem tenant. Rental payment history is also not part of the credit report. In fact, the collection of rental payment history is relatively new among the bureaus and it is a field that is still being developed. Unfortunately, many tenants know this and use it to their benefit. When they know that late rental payments do not show on their tenant credit report they don’t go the extra mile to get the rent paid on time. Because of this, it is always strongly recommended that when screening a tenant, in addition to doing a tenant credit report you also purchase an eviction report and contact previous landlords for a reference. Unfortunately, people with good credit are oftentimes bad and sometimes even previously evicted tenants.
Criminal records or criminal history are also not part of a tenant credit report. As a landlord, you want to avoid being negligent so it is important to know if someone has a criminal history that could potentially endanger yourself or other tenants. What if the applicant has a history or theft or assault or crimes against children? You also don’t want to run the risk of having your property used as a meth lab.
A very important fact to know about tenant credit checks is that they will not tell you someone’s income or their current employment status. Income amount is never part of a tenant credit report. Some reports may list whatever last employer was reported to the bureaus-this is often out of date or simply wrong. A solution would be to verify employment by contacting the employer’s human resources department directly and/or request a copy of a paycheck stub or W2 to verify income.