How to read a LandlordStation credit report

Tenant screening can make the difference between finding high-quality tenants and renting situations that end in eviction, property damage, and lost income.

Getting a credit report from a service such as LandlordStation is the first step in determining whether a tenant is a good candidate.

You need to know how to read the report for it to be an effective tool for screening.

Score Factors
The credit score itself doesn't tell the applicant's whole story.

Some may have a great credit score, but red flags may appear you look deeper at the tenant screening.

On the other hand, low credit scores could come from long-resolved credit problems.

The LandlordStation report provides a summary of the major score factors affecting that number, such as delinquent accounts, tradeline mixes, and derogatory accounts.

LandlordStation reports provide you with a recommended course of action based on the findings, like requesting additional financial security prior to renting to a tenant with a negative credit and eviction past.

Credit Summary
The credit summary breaks down credit report tradelines by account categories, such as installation and revolving.

This summary allows you to see what other financial obligations your potential tenant has, like car payments.

This information is valuable to determine quickly whether the tenant can afford rent on top of other debt obligations.

Keep in mind this does not show all other bills the tenant has, it only covers tradelines reported to credit bureaus.

Tenants with stable employment histories are less likely to leave you without a rent payment.

This list shows verified employment, which is useful if you're double checking claimed employment history or need a source for a character reference.

The tradelines section of a tenant screening details the tenant's bank accounts. It displays account balances, total credit lines-  whether an account is open or closed-  missed payments, and other essential information. The Past Due and Current Status sections are the most important areas. High balance credit cards are another warning sign, as the tenant may be using cards to pay for a lifestyle they can't afford.

Derogatory Items
Derogatory items summarize negative events on the credit report.

These items range from public records to collection accounts.

If you're looking for applicants with a long history of good credit, seeing items in this summary is a bad sign.

Pay attention to the following derogatory items if they show up on your applicant's tenant screening:

1. Past Due
The past due section provides a summary of all accounts that are overdue or closed with a balance.

While this section indicates poor financial responsibility on the tenant's part, it's important to look into how long ago these problems occurred.

A credit report spans many years, and delinquent accounts last for seven years.

2. Collections
All collection accounts are listed in this section.

Look through the list to see whether any of the debt is old, medically-related or if the accounts have been paid in full.

A collection is not always an indication of a bad tenant if they have handled it in some form or fashion.

3. Public Records
The public records section reveals any publicly-available records for the tenant.

Judgments, bankruptcies and other court records are detailed in this section.

If you're willing to rent to tenants with poor credit history, this section allows you to see how long ago these problems occurred.

4. Inquiries
Inquiries are created when a tenant applies for tradelines.

If the tenant has a significant amount of recent inquiries, this could indicate the potential to take on an unfeasible amount of debt through credit cards and installment loans.

It should be noted that LandlordStation runs what is considered a ‘soft inquiry,’ meaning that it does not affect their credit score.

5. Criminal History
Discover whether the tenant has a criminal history and learn details of the activity to help inform you decision.

6. Eviction Records
This section details any eviction records related to the tenant.

If the eviction occurred a long time ago, especially when the tenant was young, they may have changed their ways.

However, previous evictions should raise red flags as they represent a major risk.

Exploring the LandlordStation credit report gives you extensive visibility into your potential tenant's financial responsibility, criminal record and public records.

Use this information to screen for the best tenants for your properties and avoid a major hassle down the road.

Posted on Aug 18, 2015


The Landlord Tenant Board: What it is and When it is Needed

Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More

How to Review a Rental Application

When it comes to reviewing a rental application, all of it may seem daunting; you will find it overwhelming because there is so much information that you yourself have to go through before the tenant... More

How to Create a Residential Lease Agreement

Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More

The Best Sites for Rental and Lease Agreement Templates

Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More

Landlord Obligations: The Responsibilities of a Landlord

Becoming a landlord is a major deal and no one can simply get up and think, “well, yes I think I should be a landlord and rent out my flat.” If you are thinking that you would like to be a landlord,... More

The Best Landlord Associations for Landlords to Join

If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More

The Best Landlord Forums

Landlords and aspiring landlords, do not become as such, without guidance and advice. There is a lot that goes into being a landlord nowadays; in fact, there is so much to learn that it often confuses... More

The Biggest Landlord Problems and How to Fix Them

Renting out an apartment or a house can become a constant revenue source for landlords, but at the same time, it gives rise to several problems. It is a fact that high standards, a strict lease... More

Landlord Tenant Disputes

If you are currently thinking of becoming a landlord only because it helps you have a constant stream of income, you should think twice. It’s not that you should not consider offering your property... More

Prospective Tenants

In case you’re going to establish a new landlord tenant relationship, it is important that you proceed with extreme care. Though it is a good idea to offer your property for rent and make some money,... More