How to Dig Deeper Into a Credit Report

Many landlords and property management companies treat credit scores like they're a straightforward indication of the quality of a tenant, but this may not be the case.

If you dig more deeply into a credit report and try to puzzle out the story it tells, you may find information that can mitigate the importance of unpaid bills, bankruptcies and so forth.

But where do you go for the information that can help you figure out why a credit report looks the way it does?

The Tenant
You shouldn't treat your tenant like he or she as the best or final source when you're looking for more information.

Some tenants lie about bad credit or other problems that come up during a screening. If you do ask your tenant what happened, be ready to do more legwork to get the other side of the story.
But it can't hurt to ask.

If you see a problem on a credit report that you want more information about, go to your tenant and ask what happened, in a calm, straightforward manner.

From there, you can do more research.

Of course, if the actual story differs considerably from the tenant's version, you've got another valuable piece of information about your tenant: he or she is willing to lie to you.

Late and Unpaid Bills
Late and unpaid utility bills typically appear on credit reports, even before they go to collections.

Typically, these matters are fairly straightforward and don't involve a lot of homework on your part—a tenant didn't pay a bill, or paid it late, and received a small mark against him or her on the credit report.

Be aware that if you want more information, you may be able to get it from the utility company but, depending on the utility, company, and local laws, they may treat it as a confidential matter.

Debt Collectors
Collections remain on credit reports for a very long time, so you may want to call a debt collector to try to get more information.

What collectors can say about debtors is typically limited by privacy regulations, so you may not be able to get much useful information (and what you can get may vary based on your local or state laws).

Still, it can be worth the effort, and you'll likely be told if the bill was paid off.

If you can't get that information, talk to the prospective tenant and ask him or her to authorize you to speak with the bill collector.

Bankruptcies have, hands down, the most powerful negative effect on a prospective tenant's records.

Thankfully, bankruptcies are a matter of public record. If you want more information about a bankruptcy, you can go to the court where it happened and ask for all salient records.

You may need to do some detective work, however, to figure out where the bankruptcy was filed, especially if the tenant isn't cooperating.

Credit Bureaus
If your tenant claims to have no idea what's going on with a troubling line on a credit report, you (or the tenant) should consider contacting the credit bureau.

Keep in mind that here, too, you may run into problems with confidentiality.

But if there's a line on the credit report that genuinely does not belong there, talking to the credit bureau may give you some perspective, and your tenant may be able to clear it up.

A credit report tells a story about a prospective tenant's financial history over time.

But that story may be incomplete. If a tenant is promising but has troubling credit, taking the time to get more details about his or her financial history may be worthwhile.

Posted on Nov 11, 2015


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