It makes a lot of business sense for landlords to run a credit check on prospective tenants. This is one way for landlords to safeguard their financial interests. To avoid future inconveniences, here are some of the things that you need to do in ordering a credit report for your tenant.

Why Landlords are Ordering A Credit Report On Their Tenants

Even though potential tenants are likely to provide you with information on their own, you absolutely have no way of knowing whether that information is accurate or whether they left out some critical details. To get rid of the doubt, it is recommended that you use the best way of ordering a credit report on your tenant.

Under the Fair Housing Laws, you have the right to deny a tenant accommodation, in the event you believe that they are not able to meet their financial obligations. Therefore, by ordering a credit report on the potential tenant, you’ll be arming yourself with an objective basis for accepting or rejecting their application.

Ordering a credit report on your tenant will give you a better idea of their paying patterns. A tenant that misses out on payments should be asked for a higher deposit, as there is a possibility that they might default on payments. You would be well advised to ask for a co-signer in such a case, or if you feel that you don’t want to risk, then you need to find a more financially-stable tenant.

Requirements for a Tenant Credit Check

Before ordering a credit report on your tenant, there are a couple of things that you will need.

• Tenant’s Permission
  Before running a credit check on a potential tenant, you will need to have their explicit permission. Numerous rental applications usually have clauses that grant you the permission you need in getting a credit report on your tenant. However, in the event that this clause is lacking in the rental agreement, you will have to use a different form.
• Full Personal Information
  Such information will include date of birth, social security number and current address.

Due to the sensitive nature of all this information, you need to make certain that you lock it up securely (in a locked room or cabinet) to avoid instances of identity fraud.

Make Your Work Easy

Some creditors report only to one bureau while others report to all. Since you may not have time to sift through all the bureaus each at a time, it is recommended that you use a service that will cover all the three major agencies, that is, Experian, Equifax and TransUnion. This way you will ensure that you don’t miss out on any important information in the credit history.

Be Cautious

If you would like to know more about the potential tenant you are about to rent out your premises to- and you feel that ordering a credit report on him is not enough, you may want to consider hiring a tenant screening service. This way, you’ll be able to request for eviction reports and also get to run background checks on the potential client.