If you’re looking to get credentialed for full credit reports then you will need to pass an on-site inspection (or on site inspection depending on your preference).
As a good rule of thumb, we say no home-based businesses or home office situations.
Not because it’s impossible, but because most don’t meet the strict requirements per FCRA rules and regulations.
A table of contents for an On-Site Inspection Checklist:
- What is an on-site inspection?
- What is required to pass an on-site inspection?
- Activities that will lead to a failed inspection
- How long does an on-site inspection take?
- How much does an on-site inspection cost?
- Shop around before you lock-in
An on-site inspection (as it relates to credit reports) is where an inspector will come to your business to verify that your business is legit and secure enough to run credit reports. This inspection is mandated by the FCRA (Fair Credit Reporting Act) and in conjunction with the Gramm-Leach-Bliley Act. The main purpose of this is to verify the security of sensitive information that will be accessed by the end user (a property manager, CRA, banker, etc).
Site inspections are very non-invasive and in fact, they usually never last longer than a half hour (usually much shorter in fact). However, regardless of your current business status or how awesome your new office space looks, you need to make sure you are well prepared before the inspector shows up at your door.
Your Business Office Must Be in a Commercial Setting
The official rule says that the location of your office or place of business where you will be running credit reports must be in a commercial setting. Some examples of acceptable commercial settings are office buildings and business parks, to name a few.
What If I Work From Home?
When it comes to site inspections and home-based offices or business, the main factor that the inspectors look for is that there must be separated from the living quarters. This means the office should have a separate entrance from the house and a lockable doorway to the rest of the house.
Most people who have site inspections done at their home-based office do not pass. A good tip if you have a home-based business is to have your office set up in a space that isn’t attached to your home, such as your detached garage (yes, we have seen clients pass with this before).
You Must Have Office-Appropriate Furniture
Not only are first impressions important for site inspections (but not taken into account when deciding if you passed or failed), but you must have the appropriate office furniture that the site inspectors will be looking for.
No, we don’t mean cool leather couches or new glass desks, but furniture that will help aid in the safety, security, and even destruction of the credit reports that you will be gaining access to.
Two main pieces of office furniture (or equipment) that the inspector looks for are:
- Functional Locking Filing Cabinet(s)
- Paper Shredding Service
You’re probably wondering why you would need a locking filing cabinet, but it’s one of the most important parts of the inspection.
This requirement is to ensure that you will be storing any printed tenant screening or credit reports securely.
The inspector can ask to see if the cabinet works, so be prepared and have the key ready.
You Must Keep Rental Applications on File for 5 Years
Good tenant screening companies, like ours, will store these documents for free when running your tenant background checks.
RentPrep stores data in the cloud and uses 128-bit SSL standards, the same as your online banking.
If the tenant screening report doesn’t require you to send in the rental application, you can still request the application to be stored. And again, most good tenant screening companies will do this free of charge.
Paper Shredding Service
The obvious reason for this is to destroy the tenant screening reports.
If you don’t want to purchase a paper shredder machine, you can look into a service like Shred-it that RentPrep uses here in our office.
Signage and Stationary With Your Company Name Must Be Present
Another thing that the site inspector will look for is a sign with your company name and/or logo to be visible when he or she arrives. Typically this means a sign on your office building or just a simple sign that hangs on your main entrance door.
What if I don’t Have a Company Sign or Logo?
A little trick is to simply write your company name on a sheet of paper and just hang it on your door.
Though it may not seem effective, this has worked 100% of the time for our clients who have done this exact thing and they are now happily ordering credit reports on their applicants.
As for stationary, this simply means some documents with your company letterhead or just a business card. This isn’t always an important part of the inspection process but could very well be factored in. Just be prepared.
Your Business Must Have an Exclusive Phone Number Listed
Some businesses are smaller and just run through the owner’s cell phone when they’re starting out.
In these instances, we would suggest a Google Voice number to separate the business number from a personal number.
As an added bonus, if you list your business consistently on as many relevant citation sites as possible, it will help you show up on search results when local people search for the services you provide.
A great tool that we have used to list our business on multiple citation sites is called BrightLocal.
***If you’re a property manager looking to run background checks in a high volume and you call our office for a free quote… our Marketing Director would be happy to do a free assessment of your online presence. With a few minor tweaks, you could be getting more leads for your business.***
The site inspector makes sure that credit reports (along with personal and confidential information) are not being used for any other reason other than your permissible purpose. In this case, it would be tenant screening.
Here is a list of activities that your company can absolutely not be involved with:
- Investigative/Detective Agency
- Pawn Shop
- Credit Repair/Credit Counseling
- Check Cashing
- News Agency or Journalist
- Process Server
- Bail Bond Company
Just a heads up to anyone trying to “game” the system.
If you are caught by the credit bureaus trying to illegally obtain credit reports, your company along with your name and identity will be placed on what’s known as a “blacklist”, which is sent periodically throughout each calendar year to the credit bureau’s clients in order to make sure you are never given the opportunity to handle credit reports and credit data again.
On-Site Inspections usually take anywhere from 5-15 minutes. One of the biggest factors in how long the site inspector stays is how chatty he or she is.
The pictures that will be taken of your office and the signature they’ll get from you both only take a few minutes.
Site inspections typically cost between $50 and $60. This is our cost, in other words, what the tenant screening company is charged. Some companies make money on the site inspection fees so try and find a company that doesn’t over-charge. In fact, most tenant screening companies charge upwards of $100 or more, so look out.
Once you get set up it can feel like too much of a pain to switch to another service.
However, you could be leaving hundreds if not thousands of dollars on the table by not shopping around for a better price and better support.
Check out our blog post on how to negotiate background checks in bulk. It will teach you a few tips on what to know before you sign the final dotted line.
We can quickly give you a custom quote if your looking for tenant screening for property managers.
Our guide to onsite inspections may have seemed a little exhausting, but we really want to make sure you know exactly what to expect and how to prepare ahead of time.
- You need to have an office in a commercial setting or if you’re home-based it needs to be separate from your living quarters.
- You need office furniture and equipment such as locking filing cabinet(s) and a paper shredding machine.
- You need a sign on your door with your company name on it.
- You need a business phone number listed on at least one directory website such as Yellow Pages.
- You need to be using credit reports solely for the purpose of tenant screening.
- Site inspections take 5-15 minutes to complete and cost anywhere from $50-100.
Your site inspection is usually set up by the Consumer Reporting Agency (CRA) you are trying to use for credit reports (such as RentPrep), and the inspection agency will contact you to schedule a time.
Once the inspection is completed, the inspection agency will notify the CRA if you have passed or failed. If it’s a pass, then the CRA will give you immediate access to credit reports.
I hope you found this guide to be helpful and make sure you pass it along to anyone you may know who has a need for tenant screening and/or credit reports.
Don’t hesitate to call our office (888) 877-8501 or email rich@rent-prep to get a custom quote for your credit and background check needs.