A tenant credit check from LandLordStation.com includes a variety of information that assists residential property management professionals in the assessment of a potential tenant. As part of the complete services that we offer, we obtain a renter credit check that includes a credit report and credit report scores.
After we perform a credit check for renters, we send you the credit report scores on your applicants. These numbers, ranging from 300 to 850, are often used to indicate the level of risk of an individual defaulting on payments. High credit scores indicate less of a risk. Generally, any score above 650 is considered a medium risk or less. But, don’t put too much value in a high credit score, because this number does not reflect the many other characteristics which make for a good tenant, such as the ability to get along with neighbors, and take good care of your property. These are also very important traits that you want in a tenant.
When you order a credit check for tenants from Landlordstation.com, you get a report that covers the past seven to ten years. It includes information on late or delinquent rental payments and bills, including student loans and car loans. Our report also consists of information on whether the applicant has filed for bankruptcy. You can see if a potential tenant has been convicted of a crime, evicted from a rental, or was involved in another type of lawsuit, such as a personal injury claim.
LandLordStation.com will search the three credit reporting services, Equifax, TransUnion and Experian, so you get the most complete information possible on potential tenants. Credit checks can contain mistakes, so if you reject a prospective tenant because of a negative credit report and score, you must give the applicant the name and address of the agency that reported the negative information. This is a requirement of the Federal Fair Credit Reporting Act (15 U.S. Code 1981 and following). You must also tell the applicant that he or she has the right to obtain a copy of the file from the agency that reported the negative information. The applicant must request a copy of their file within 60 days of your notice of rejection. This notice is also required if you penalize a tenant, in any way, based on the credit report and score that you obtained.
The definition of a penalty based in a credit report and score includes one or more of the following:
1) You require a co-signer on the lease
2) You require a deposit
3) You require a larger deposit
4) You raise the rent to a higher amount
The Federal Trade Commission has placed into effect a variety of actions that you must to perform if you take any of these steps. Check with your legal experts to be sure that your actions are within the law.
You are legally free to check a potential tenant’s credit check report and score, and use the information when selecting tenants, as long as you don’t illegally discriminate in doing so. You must request credit report scores for every applicant you are considering. You cannot request credit reports for specific tenants, or set a higher standard (like demanding a higher credit score) based on race, ethnicity, or any other protected class as stated in the Federal Fair Housing Act.
Be sure to familiarize yourself with state law pertaining to the handling of tenant credit check information. In some states, you must destroy the credit checks of any rejected tenants. If you have questions regarding this topic of tenant credit check and score usage, visit our Community page. You will find on-going discussions with leaders in the residential property management community regarding this issue. If you don’t see information that answers your questions, you can join the conversation in the community and ask your question at no charge. This is a unique and invaluable service that we provide to our customers. For a great source of landlord information, visit LandLordStation.com.