If you’re Googling, “How do you do a background check on a potential tenant?” you’re already off to a good start.
That’s because not every landlord does a background check on a potential tenant.
Steps: How do you do a background check on a potential tenant?
Here are bullet points on what you’ll need to run a background check on a potential tenant.
- Signed consent
- Understand what you want in the background check
- Decide on tenant involvement
- Sign up for a background check service
- Order a report
The list above is a clickable table of contents that will shoot you down this post to each subject. There you can find more details on each section.
Step 1: Signed Consent – How do you do a background check on a potential tenant?
It is illegal to run a background check on a tenant applicant without their signed consent.
Many (but not all) rental applications have verbiage that the applicant gives permission to a background check.
Here’s what that section looks like on the RentPrep rental application.
If you’ve already accepted a rental application, but you do not have a section giving permission to run a background check you’ll want to use a separate release form.
This way your applicant won’t have to fill out an entirely new application to give signed consent.
Here’s the release form we use here at RentPrep.
Once you have signed consent you can move to the next step in running a background check.
Step 2: Understand what you want in the background check
Not every service is equal. Each service has pros and cons and you can read about the differences between background check services.
The most important thing is that the service you use provides solid eviction data.
In our opinion it’s the easiest piece of data to look for to see if your tenant screening service is legit.
A Transunion study shows that a tenant applicant with a reportable eviction on record is more than 2.5 times likely to be evicted compared to a tenant applicant with no evictions on record.
As a landlord, you don’t want to go through an eviction, so make sure your service provides eviction data.
If they don’t provide eviction data in the basic package or they’re trying to up-sell nationwide eviction data you will want to look elsewhere.
At RentPrep we cross-reference multiple eviction databases to make sure our eviction data is as thorough and accurate as possible.
Step 3: Decide on tenant involvement
This is a simple step but worth your consideration.
Some services require tenant involvement and others have zero tenant involvement.
We actually provide both types of services here at RentPrep and that’s because different landlords have different needs.
We offer the TransUnion Full Credit Report, formerly known as SmartMove, for landlords who want a full credit report and the ability to charge the tenant applicant for the report.
However, this will require tenant involvement.
Here’s a few reasons why tenant involvement can be frustrating:
- Hurts conversion
- Slows down process (potentially)
- Does your applicant have internet access
Our data shows that about 70% of these requested reports are completed. This means 30% of the time the tenant doesn’t complete the background check.
The tenant also will dictate how quickly the report gets turned around. If they take a week to reply the report will take a week to get done.
Lastly, if your applicant doesn’t have an email address, access to the internet, or has poor computer skills than a service with zero tenant involvement might be a better fit.
Here at RentPrep our Basic, Pro, and Platinum reports are zero tenant involvement while our TransUnion Full Credit Report, formerly known as SmartMove, package requires tenant involvement.
You can compare those packages here.
Step 4: Sign up for a background check service
This step is simple. One thing to be aware of is that some services charge a monthly fee no matter if you use them or not.
We recommend sticking with a service that uses a “pay as you go” model.
Also, you’ll want to make sure your service is using a secure website.
When you’re on the sign up page where you’re entering your information, look at the url bar at the top of the page and make sure there is a secure lock.
On chrome (on our sign up page) it will look something like this.
That green lock lets you know the website is secure and your information is encrypted. This is a small step but always worth a look.
Step 5: Order a report
How to order a report all depends on the service you use.
If you’re interested in ordering a report through RentPrep, this page will show you how to sign up and order a report.
If you need help reading your report or have questions with tenant screening, click our Live Chat button at the bottom of the screen to connect with one of our FCRA Certified Screeners.