Obtaining a credit report for possible tenants is a critical step when searching for a renter to inhabit your property. Tenants with good credit bureau reports are more likely to pay rent on time and less likely to breach a lease. Obtaining the prospective tenant's credit bureau report is simple, but you must adhere to specific rules that are set forth by the Fair Credit Reporting Act (FCRA) and Fair Housing Act (FHA).
Instructions
1. Have prospective tenants fill out an application that discloses your intent to run a credit check on them. This application should include the applicant's name, address, previous address (if applicable), date of birth, social security number, employment information and landlord references.
You must explain to the applicant on the application that you will use this information to conduct a credit (and/or criminal background) check that may influence your decision on whether you will be renting your property to them or not.
You may wish to charge a fee to the applicant to run this credit check so that you can recover any costs associated with it.
2. Choose a service from which to run tenant credit checks.
There are many online services that allow landlord's to pull their potential tenant's credit bureau reports. Some services require a monthly fee while others charge per report. Depending on how many properties you own, you can decide which option is more efficient for you.
Popular online companies that provide credit services to landlords include MrLandlord.com, citicredit.net, e-renter.com, and bestcheck.com, among many others. Fee schedules vary based on the type of service requested.
3. Notify the applicant in writing if you are unable to lease the rental property to them based on information obtained from their credit report.
If you find that an applicant's credit report isn't favorable enough for you to extend them a lease contract, you must notify the applicant. While you do not have to disclose the exact reason why you chose to deny his application, you do need to tell him that the information you viewed on his credit report played a role in your decision. This step is required by the Fair Credit Reporting Act.
