Limitations of traditional background searches

Flaws in traditional background searches have long been a common sticking point when it comes to topics such as gun control and immigration.

As the National Association of Professional Background Screeners says, “There is no single government database containing complete and up-to-date records regarding a person’s criminal history.”

These types of searches also fall short with tenant screenings, but if you understand the limitations of traditional background searches, you can begin to address them.

About Tenant Background Searches
Landlords and property managers use tenant screenings to analyze the suitability of prospective tenants: how likely they are to pay rent in full and how likely they are to follow other lease terms.

The Fair Credit Reporting Act (FCRA) regulates the use of information reported to tenant screening services and other credit reporting agencies.

Tenant background search reports typically contain at least several of the following: credit history and/or credit score from Experian, Equifax, or TransUnion, eviction records, sex offender and/or criminal records, and information on income, employment, and rental history.

Common databases used for the criminal aspect of tenant background searches are the FBI Identification Record and the Interstate Identification Index System, or III.

Although the name of III might lead you to believe that information is freely and instantaneously communicated among local, state, and federal government entities, the reality is that many records fall through the cracks.

Also, many criminal records are maintained according to the alleged offender’s name and date of birth, and not necessarily via a Social Security number.

Background searches on people with common names sometimes return results for the wrong people, and the system is set up so that a prospective tenant can show false identification and “borrow” another person’s name and date of birth.

In court cases such as eviction suits, your prospective tenant may have won, but the record was never updated, possibly leading you to wrongly believe she was evicted due to her own fault.

The potential pitfalls are not all criminal. It's common for landlords who rent out only one or two properties to not report consequential information to credit reporting agencies, instead choosing to absorb a loss due to missed rent, property damage, or some other cause.

Even some larger outfits forego this process.

Contacting previous landlords directly is not always possible, either: a tenant may have falsified previous history or given erroneous contact information.

Some landlords also prefer not to communicate negative information.

How to Address Limitations
Fortunately, there are a few ways to make a dent in some of the limitations.

For example, some companies such as LandlordStation use TransUnion to go a few extra steps in the criminal background check.

They request deeper searches from credit reporting agencies, including information on criminal records, that are potentially inaccurate; however, there’s always the possibility of missing out on information due to local laws or other regulations.

When you contact previous landlords, you increase your chances of getting useful information when you ask about issues that require specific answers as opposed to open-ended questions.

Don’t ask questions like “Was ABC a bad tenant?”.

Instead, inquire along the lines of “Was ABC late for any rent payments?” and “Did ABC get his security deposit back when he moved out?”.

Asking if the landlord would rent to the tenant again can also provide valuable insight.

As you can see, the information in background searches is sometimes incomplete or flat-out wrong.

Due to this, landlords potentially reject perfectly suitable tenants, or welcome questionable tenants with open arms.

To avoid this happening to you, be as thorough as possible and cover all of your bases.

Posted on Aug 27, 2015


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