A landlord may review a potential tenant's credit profile, income and employment information. The credit profile helps a landlord know that the tenant has financial resources to pay the rent. Landlords should prepare a release form to get permission from the prospective tenant to obtain a consumer credit and criminal background reports. Mistakes on credit reports are "rampant," according to "Every Landlord's Guide to Finding Great Tenants." Request references from previous landlords and employers to determine a potential tenant's suitability.
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Check each prospective tenant's credit report. As part of the rental application, request the prospective tenant's employment, income and references. The credit report provides corroboration of the prospective tenant's name, job, salary and Social Security number. The report may also provide information about lawsuits, bankruptcies and evictions. Some prospective tenants may bring a recent credit report. You may elect to run a new report for accuracy. At your option, charge the prospective tenant to access the credit report. Most landlords run credit reports through a smaller credit agency, or affiliate, of Equifax, Experian or TransUnion. Arrange an account with an affiliate agency yourself. According to "Every Landlord's Guide to Finding Great Tenants" by Janet Portman, you'll pay £6 to £13 per report. For more extensive reports, use a tenant screening services. If you run many prospective tenant credit reports, consider a local or state apartment rental association to save money.
Protecting the safety of your property and safeguarding other tenants living there, is the landlord's responsibility. A criminal background check may be included as part of a tenant screening report from a credit reporting agency. If your tenant screening report includes this information, author William A. Lederer of "The CompleteLandlord.com Ultimate Landlord Handbook" says it's OK to review it. Some states don't allow access to information concerning a prospective tenant's prior criminal history. Information contained in the reports may be outdated or wrong. If your state permits a criminal background check, obtain a current report after getting permission from the prospective tenant from your state's Office of the Attorney General.
According to the Fair & Accurate Credit Transaction Act of 2009, landlords must safeguard confidential consumer credit information. Only those individuals within the landlord's organisation who "must know" about the consumer's credit report may review it. The Disposal Rule, FACT Act 69 Fed. Red. 68690, requires landlords to dispose of consumer credit files after the purpose of obtaining the information has been served. Burning or shredding the files keeps consumer data safe from identity thieves.
Your prospective tenant's race, gender or sexual identity shouldn't be considered as part of a prospective tenant evaluation. Discrimination is illegal. Information provided to a prospective landlord on the rental application is confidential. Landlords should check information provided to verify the potential tenant's suitability according to criteria established by the landlord. For example, a landlord maintains a strict policy against renting to tenants with a prior eviction within the past two years. Reject the prospective tenant's application in writing. Your letter should contain the source of information. The prospective tenant may dispute the information in writing under the Fair Credit Reporting Act.
Tips and warnings
- Contact former landlords by phone to obtain a reference.
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- "Every Landlord's Guide to Finding Great Tenants"; Janet Portman; 2009; Page 319
- American Apartment Owners Association: Rental Association
- The Complete Landlord.com: Criminal History
- Access GPO: FACT Act 69 Fed. Reg. 68690
- "The 250 Questions Every Landlord Should Ask"; George Sheldon; 2009: Reject
- "Leases & Rental Agreements"; Marcia Stewart, Ralph Warner, Janet Portman; 2009: Fair Credit