Many landlords find it a necessity to check a prospective tenant’s credit report to see how well they manage their money. Many times, landlords will find themselves in a bind when their tenant is negligible with their finances and end up not paying their rent. So, in order to minimize this risk a credit check is often done.
If you’re a landlord, then you understand that hardships of making sure a tenant pays regularly and on time. You can’t just force someone to hand over a signed check; you have to trust them enough to know that you won’t get duped in the end. Here are some things that you need to look out for in a landlord credit check.
Important Factors to Look Out For
When you obtain a credit report from one of the many tenant verification services out there, you’re going to come across a gold mine of information pertaining to that tenant’s credit. For instance, you’ll see whether or not someone has ever filed for bankruptcy in their lifetime. These signs and signals are good determining factors in whether or not you want that person living on your property.
One of the first things that you’ll see is whether or not your prospective tenant is late or delinquent on paying their rent or bills – this also includes student loans. You’ll also see their credit score; depending on the service that you use most of them show their “FICO” score. Much of this information will only go back from seven to ten years – this varies though.
After receiving your credit report, keep an eye out for red flags. If you notice that a tenant has been evicted from his or her last residency, see what issues occurred. Were they in between jobs? Did they not have enough money? Or, did they cause trouble? All of these factors play a large role in how they’re going to be living on your property. If they’ve always had a history of missed and late payments, who’s to say they won’t do it again once you give them the benefit of the doubt? The goodness of your heart might clash with your business mentality, but you have to remember that your property is costing you money in regards to upkeep. If you want to make a profit, you’re going to have to put your foot down somewhere.
Tenant Screening Services, LLC offers an instant online background check for landlords looking for security on their property. Visit them online for more information.