Landlords put a lot of time and effort into every aspect of their rental business; there are many things that take lots of dedicated reviews and effort to get right.
Among everything that a landlord has to do, however, it is arguable that the most important thing of all is how they handle tenant screening, including credit reports. Having the right tenants at your property can make or break your profit line, and that is why landlords are always looking for ways to streamline their search process.
One tool that is often used to make decisions about tenants is their credit score, but not all landlords are familiar with how to order tenant credit reports for landlords review. Is it legal to look at their credit score? Is the tenant informed that I’ll see that data? There are a lot of questions that landlords have when they are dealing with credit reports.
Being informed about how a credit report for a tenant sent to a landlord can and cannot be used is important. Accidentally using this data incorrectly could lead to an expensive lawsuit, so take a few minutes to review the information gathered here today.
A Table Of Contents: Tenant Credit Reports For Landlords
- How To Get Tenant Credit Reports
- Why Tenant Credit Reports Are Important
- Credit Report FAQs
When it comes to the process of obtaining tenant credit reports for landlords, it actually isn’t as difficult as some might believe it to be! The main methods of running a credit check are to run a report directly through a consumer reporting agency or to run the credit check with a specialized agency.
#1: Consumer Reporting Agencies
Running a credit check directly through a credit check has long been how landlords are able to get a simple but clear credit report.
Experian, Equifax, and TransUnion each have a method of running a credit report on tenants; these methods usually involve logging in and providing the tenant information along with any necessary fees. The report is then sent to the tenant for supplementary information and approval, and then the final credit report will come back to you.
Each of these agencies has different information that they provide in their credit reports. This is because of differences in policy as well as the information that is collected by each of these bureaus. Because of this, landlords often stick to one of these agencies to keep their results on a consistent baseline.
#2: Specialized Agencies
Another way to get a credit report is to run your tenants’ information via a specialized agency such as RentPrep that is created specifically for use by landlords.
Obtaining legal credit information for these types of services is often preferable to landlords because you are given a clear-cut, decision-focused report that highlights the things that matter most to landlords. In many cases, you can even request specific information to be highlighted.
The information is also filtered in such a way that landlords will not accidentally abuse their right to see financial information about a prospective tenant. Specialized agencies know exactly what landlords should and should not see, and they process any supplemental information to match those guidelines.
Having additional protections and context provided by a specialized service can make a big difference when you are making your final decisions about which tenants to choose.
Get What You Need From RentPrep’s Screening Services
Here at RentPrep, we offer two different screening services. Both of these services include some type of credit report that can help you make a decision about whether or not to accept a tenant’s application for your property.
The first service that can be ordered via RentPrep is the SmartMove Full Credit Report. This report gives you the exact credit score of a tenant, and it must be ordered with the tenant’s involvement. The full report includes:
- Full credit report including ResidentScore
- SSN verification
- Address history verification
- National criminal and eviction search
- Option to have applicants pay
- Option judgments and liens search (done directly by RentPrep)
With this report, you can easily see a lot of different information about all prospective tenants, and that information should be able to inform your decision.
Can a landlord order a credit report for the tenant without needing to be directly involved? You can if you use RentPrep’s Background Check service. This affordable service checks SSNs, addresses, evictions, bankruptcies, judgments, liens, and gives a pass/fail ranking for each screened tenant based on your guidelines.
Which of these services will work best for you is going to depend on your exact needs or the number of tenants that you want to screen.
At the simplest level, credit reports help you verify that a tenant is who they claim to be and that they do not have any glaring credit issues.
Tenant applications that are left unvetted could be full of lies that mislead you, and that would lead you to put the future of your property and business into unknown hands. In order to conduct business smartly, it’s important to use credit reports to verify:
- Tenant SSN
- Tenant address history
- Tenant bankruptcy history
- Tenant national criminal history
- If tenant credit score is acceptable (either via specific number or a range of numbers)
There is more information that can be gleaned from credit reports, but these facets are enough to give you a good idea of whether or not a tenant is being honest with you. Some “red flags” may not be issues if the tenant is upfront with you about such issues, but hidden problems can easily be discovered with a quality tenant credit report.
How Do I Get A Credit Report For A Prospective Tenant?
The easiest way to get a credit report for a prospective tenant is to start by having them completely fill out a rental application, including their SSN and full legal name.
With this information, you can use a service such as the SmartMove full credit report to unlock their credit history, address history, and more. The tenant will need to sign in to complete this process, but you will get a comprehensive report.
Where Can Landlords Get Credit Reports?
There are many different services that can be used to obtain credit reports.
With the rise in popularity of services such as SmartMove that are facilitated through TransUnion, reports from SmartMove can even be ordered indirectly with add-ons through sites like RentPrep.
The best way to decide which credit report to use is to consider the exact information you think you need to make a decision and choose the service that aligns with your needs.
What Is The Best Credit Check For Landlords?
Most landlords do not need to know the exact credit score that a tenant has; having an idea of whether the score is generally good or bad is often enough information to make your final decision about a tenant.
After all, the credit score is not the only factor in your decision process.
If you are happy to only be able to see a Pass/Fail result, RentPrep’s Background Check service is a great option.
How Do I Get A Credit Check On A Tenant In Canada?
To run a credit check in Canada, you will need to use either a qualified consumer reporting agency or a tenant screening service that can gather the necessary information.
In Canada, both Equifax Canada and TransUnion Canada can be used to run consumer reports with tenant involvement, and tenant screening services can be used to run other types of reports with the proper disclosures.
How Can I Check My Rental Credit For Free?
If you are a prospective tenant and are curious about what report a landlord will see, you can ask them what screening service or consumer reporting agency they are using to get a report. In most cases, you can get a copy of all information that has been given out about you for free.
If you want to check your credit completely separate from any specific application or landlord, you can visit the Experian website to get a free credit report or credit score. While the information in the free report might not cover the exact same things as most tenant screening services, you would get a good idea of what a landlord might see.
Using tenant screening services to obtain tenant credit reports for landlords can be a very smart choice, but you need to be sure the services give you the right information. Take care to choose a service that will make it simple to:
- Understand if the tenant’s credit score meets your criteria
- Understand if the tenant was honest about their SSN and address history
- Understand if the tenant has any major, credit-related red flags
If the report doesn’t make it easy to understand these facets, then you want to choose a different report. The documents available through the tenant screening services here at RentPrep are designed specifically with landlords in mind, so they can be a fantastic resource for landlords that need support.