When you’re trying to choose the best potential rental tenant as you’re looking through applications, there’s certain information that you’re going to want to gather to be sure that you’re choosing a reliable and responsible tenant. In particular, you’ll want to run both a credit and background check.
Gathering some information, however, is regulated by federal, state, and local laws. You cannot just run background checks on any potential tenant without their permission, so you need to have a credit and background check consent form filled out by applicants.
Landlords might not be familiar with what should be included in a tenant credit and background check authorization form; we’ve got a template that will help you understand the requirements in no time at all.
A Table of Contents for Credit Check Authorization Form for Renters
- What are Credit and Background Checks?
- Why Do Landlords Want to Run These Checks?
- Why Do Landlords Need Permission to Run Background and Credit Checks?
- The Ultimate Tenant Background Check Form Template
What are Credit and Background Checks?
Credit and background checks are two types of reports that a landlord, business, or other institution can request to have about an individual to get a better look at who they are and whether or not they are responsible.
Credit checks, also known as credit reports, usually show the following information to a landlord or affiliated screening service:
- Loans (current and past)
- Court record of bankruptcies, foreclosures, and short sales
- Minimum payment amounts for debt accounts currently open
- Any history of late payments
- Credit histories
- Credit scores
Of course, the exact information that you will receive as a landlord will depend on what type of credit check you run. Tenant screening services that make running a credit check easier will provide you with detailed information about what the credit check will show.
Background checks may include credit information, but they are not as limited in scope. Rather than just reporting on the financial reliability of a potential tenant, they also cover some other areas that may be important to landlords trying to choose the best tenant.
When running your background check through RentPrep, for example, you’ll get the following information:
- Full Credit Score
- Address History
- Employment History
- Tradelines
- Collections
- Consumer Statements
- Inquiries
- Public Records
- Eviction Records
- Criminal Records
- AKAs
- Fraud Indicators
Why Do Landlords Want to Run These Checks?
When you are choosing a tenant for your property from among all of the applications that you receive, you want to be sure that you are choosing a reliable and trustworthy tenant.
Having the right tenant on your property can make a huge difference. In addition to being more likely to pay on time and in full, great tenants are more likely to take good care of your property rather than damaging it while they live there. Tenants that respect your property are better to have as you will need to repair fewer damages over time.
Great tenants are worth waiting for, and the information from a background and credit check can help you decide which tenants will have the best return for your property in the end.
Why Do Landlords Need Permission to Run Background and Credit Checks?
As a landlord, you might be required to request permission to run background and credit checks on potential tenants. However, you are not always required to ask for permission before you run these checks. Still, it is recommended that you get permission to avoid liability issues.
For example, if you deny a tenant based on information that you gathered without their permission, you could be in trouble for breaking the Fair Housing Laws. And without proof of your check or that you had permission to run it, you would have a hard time proving your case to a court.
Additionally, you can only access certain information in credit checks if you have permission to check it. Without permission, you can only look at publicly accessible information that is much more limited than the information that you can receive if you have permission.
The Ultimate Tenant Background Check Form Template
Let’s move on to the tenant background check form template, which includes permission to run a credit check as well! As a landlord, background check form templates like this can be very helpful.
We put this template together for landlords like yourself that will want to gather this information to ensure that they are choosing the best possible tenant.
While this form can be adapted and used for many different situations, this template is written for use with our tenant screening service. If you will be using another service or running the checks yourself, you will want to change the relevant information in the template before using it with your prospective tenants.
Here is the template:
| Criminal and Credit Check Release Form |
Now, let’s break down each section of the template so that you fully understand what you are asking of the tenant in this release form and why.
Basic Information
Start the release form by gathering basic information about the time and the tenant:
- Date of signing
- Property address
- Tenant name
- Social security number
There are multiple spots on the tenant name so that you can have multiple tenants (such as a married couple) all provide their information for the credit checks with one authorization form.
Gathering this information is important because it is all of the identifying information that you might need in order to be able to properly run the report on the right person. When cross-referenced with their rental application, all of this information should match up.
Disclosure
The next section of the form is the disclosure about what type of information will be gathered and who will be allowed to view that information. This section is the authorization section that clearly states what companies are being given permission to gather which information.
This section should include who is being authorized to run the checks:
- The screening company, if applicable
- The landlord
- Any property managers, if applicable
This clearly lets the prospective tenant know who is going to be looking at this information.
Next, the disclosure section of the tenant background check consent form should go through what types of information will be made visible to the above-mentioned parties:
- Credit history
- OFAC search
- Court record search
- Criminal record search
- Registered sex offender search
By letting the prospective tenant know exactly what information will be accessed, you are protecting yourself from any basic liability.
The disclosure should then include a few more security liability protections. It states that the information will be used confidentially and that the information will be gathered from reliable resources with as much accuracy as can be guaranteed.
Finally, the disclosure should release the screening, landlords, and any other parties from liability from using this information.
Rights
After the disclosure section, the tenant’s rights should be discussed. According to the Fair Credit Reporting Act, the tenant has the following rights:
- A right to request disclosure of the nature and scope of the investigation.
- Be told if the information in their file has been used against them in a decision.
- A right to know what is in their file, and this disclosure may be free.
- The right to ask for a credit score (there may be a fee for this service).
- The right to dispute incomplete or inaccurate information. Consumer reporting agencies must correct inaccurate, incomplete, or unverifiable information on request.
It is legally required for you to let prospective tenants that are authorizing these checks know what their legal rights are. Many tenants do not know that they can check on the information as outlined in the bullet points above, and it is good to inform them that they have some control over this process.
Who is Processing the Reports
The tenant must be informed who is processing the reports if a tenant screening service is being used so that they can report any discrepancies and request their own copy of the information that was provided. In this case, the full name of the screening company and address were provided in the template.
Signatures
Finally, all applicants must sign and date that they agree to the terms of the authorization form as laid out above.
Use These Forms Wisely
There are many landlords out there that would rather avoid the hassle of getting an authorization form signed and run these type of credit and background checks on every prospective tenant.
While we understand that using the forms can be complicated and tedious, the information that is available to you as a landlord with a release can help you make a more informed decision about who is the best tenant four the renting out of your property.
With the right information and this tenant credit and background check authorization form, you can do a better job of protecting your investment properties, and that should be your number one goal!