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Credit Reports for Landlords - Tenant Screening Reports

Landlords big and small have a need to get good tenants. Their best shot at getting the renters they want starts with a proper tenant screening report including a consumer credit report from one or all three credit agencies.

A full tenant screening report may include information such as criminal history, arrest records, eviction reports, lawsuit information, and verifications of the prospective tenant's employment, income and past rent paying habits. The additional credit report part of the screening product contains information much the same as a normal consumer credit report. That is, the credit report may show names, aka's, address history, reported employment history, payment history, collections, reported public records, bankruptcies, inquiries, and even a credit score if requested.

Credit Reports for landlords generally require that the landlord seeking tenant credit reports to set up an account with a tenant screening company. After the landlord signs the account agreements to open the account, the tenant screening company may need to do some background research on the landlord company (or individual) opening the account, sometimes including a physical site inspection. There may also be a setup fee involved and sometimes a recurring monthly charge. When the account is opened, the tenant screen company will give the landlord a Notice of User Responsibilities under the Fair Credit Reporting Act that describes how the landlords may handle and use the the credit reports they receive.

For example, the landlord has responsibilities to the potential renter besides keeping the credit information confidential and using it only for the rental application process, like when the information in the credit report results in adverse action by the landlord. That generally means when the landlord does not rent to someone because of contents in the credit report, or the landlord uses the credit report to charge a higher rent, the landlord must give the rental applicant the name and address of the credit reporting company where they got the credit report. Then the rental applicant can get a free copy of the credit report from that company that provided it, and they can dispute any information on the report that is inaccurate.

FAQs:
Q. Should I use one bureau credit reports or 3 bureau credit reports as part of my tenant screening credit report?
A. It used to be that most landlords in an effort to save money would use only one bureau. However, in some cases getting all 3 credit reports is going to show a more complete credit history for the applicant especially if there are collections involved which may only be reported to one of the credit agencies.

Q. Should I always run a credit report with my tenant screening check?
A. In our opinion yes, you should always run a credit report as part of the tenant screening process. Plus verify employment on the prospective tenant. Plus verify the applicant's rental payment history with their last landlord and maybe the one before that.

Q. Can I run credit reports on existing tenants?
A. Probably not after the lease is signed. However, there may be a permissible purpose when the lease is up for renewal. It is always best to get the applicant's permission in writing.

Q. What's the primary law that applies to tenant credit checks?
A. The Fair Credit Reporting Act (FCRA) is probably the primary law that relates to credit reports including reports for landlords. The FCRA specifies the responsibilities of the landlords ("users of credit reports") and the rights of the applicant/tenants.

Q. How does a landlord report credit on a tenant?
A. Without opening accounts at the credit bureaus, it is challenging to report good credit on a tenant. To open a credit bureau account, there may be minimum recurring monthly fees and perhaps minimum monthly volumes. Contact them directly for their requirements.

To report bad credit on a tenant, where the tenant owes you money, it is probably easiest to send them to collection with a collection company that reports to one or all three of the national credit bureaus. Or if you get a judgement against the former tenant, the credit bureaus may pick up the public record.