What Does the Eviction Process Really Cost You?

Evictions are a landlord’s worst nightmare. If you’ve been through the process, you know this from experience. If you haven’t, you likely know from other landlords’ experiences.

There is nothing enticing about going through what can be a long, expensive, and drawn-out process to force a tenant from your rental. If it’s come to this, it’s a safe bet that you’ve reached your limit with them, but what is the true cost of an eviction?

For your tenant, an eviction on their record can affect their credit score and limit their options on rentals in the future. An eviction judgement will be available to future landlords, employers, or anyone else that would search their public records. The eviction will remain on their report for, on average, about seven years.

Those are a few things that it will cost the tenant, which can be a major hindrance to them moving forward (and a good deterrent to keep them from breaking the lease in many cases!), but what does it mean for you as the landlord and property owner?
 

Why Do Evictions Happen?

An eviction will, in most cases, boil down to a breach of some kind in the lease.

This can show in a variety of ways. Your tenant may be late in paying rent, be involved in criminal activity of some kind on the property, damage the rental property, or refuse to rectify some other action that they’ve taken in direct violation of the lease.

While they may have what sounds like a valid excuse for their behavior, the key is to keep things in perspective for your business. If they do not pay rent, there is a good chance that it will hurt your ability to pay on the mortgage or to keep up with needed repairs for the property.

A tenant that commits a crime on the property opens the landlord up to legal action against them as well as the tenant.

Damage can be done to the property in a variety of ways including, but certainly not limited to, unapproved pets scratching up floors, too many people living in the rental, smoking indoors without permission, and so much more. If you’re particularly unlucky, you may have a tenant that stretches the boundaries of creativity when it comes to the damage that they leave in their wake.

Noise complaints, threats against other tenants or neighbors, and other issues that are likely covered in your lease can cause a major problem for you as a landlord if they continue unchecked. In the end, if the tenant refuses to work with you or if the situation opens you up to liability, an eviction may become imminent.

 

Do’s and Don’ts of an Eviction

As with all legal processes, you will want to check your local eviction laws to make sure that you are crossing every t and dotting every i.

There are few things as exasperating as getting to the end of an eviction process (also referred to as an Unlawful Detainer Case) and having the case thrown out on a technicality, which will put you back at the beginning. In general (with the understanding that local laws may differ from state to state and sometimes even from county to county), an eviction process will look something like this:

  1. The tenant violates the lease in some way. What that violation is will depend on how you approach the next step.
  2. Provide your tenant with a written warning. While there may be a specific instance in which you are legally able to jump directly into the eviction process, most states will require a written warning that allows the tenant to rectify the problem before the eviction begins.
  3. If they do not correct the problem at hand, you will need to provide them with a Notice of Eviction. You will want to make sure that you follow your local laws on how this should be delivered and keep careful records.
  4. Eviction notices allow a time period for the tenant to cure the problem, but once the allotted time has passed, you will need to file the appropriate paperwork with your court system. (There will be fees involved here, but we’ll get to that in a bit.)
  5. Next you should get ready to attend court. Make sure to have everything filed correctly and all of your evidence organized. Even if the tenant doesn’t show up to the hearing, you will need to, and you will need to be prepared, with documents in writing and verification of the dates they were delivered.
  6. The eviction date will be set if the judge rules in your favor. In the best case scenario your tenant will leave by that date. You may need to contact the sheriff’s department if they do not.
  7. If the tenant owes you money, you may wish to try to recover some of those lost funds.

That is the best-case scenario. There are plenty of places in which a stubborn tenant can cause trouble and add stress to the process.

The thing to remember is that you cannot control them, but you can control your process, and one surefire way to set yourself back is by performing what is considered a Wrongful Eviction. Here are just a few things to avoid during an eviction so that you make sure to stay on the right side of the law:

  1. Never change the locks to the rental while the tenant is still occupying the unit.
  2. Never threaten or bully the tenant in any way.
  3. Never remove their property from the unit.
  4. Never shut off the unit’s utilities.
  5. Be careful about accepting partial rent.*

 

The Cost of an Eviction

Monetary Cost

Evictions can be costly with fees at every turn, loss of rent, and more. Even if you are on top of things and begin the eviction process the moment that your tenant is outside of their grace period for rent, you will still be out that rent plus what would have been owed for the duration of the eviction process. This could be anywhere from five weeks to three months.

On top of this you will have the court fees to pay. These can range anywhere from an average of $400 to $750 or more, depending on your state and local process, and that is just for the fees.

If you’re considering hiring a lawyer to help with the case, you may be looking at anywhere between $500 to as much as $5,000 if the tenant decides to try to contest the eviction in court.

If you let your frustration get the better of you and chose to wrongfully evict the tenant (also referred to as a “self-help eviction” because the landlord takes it into their own hands to force the tenant out without going through the legal process), you will find yourself back at the beginning of the process all over again, paying the same fees over, and possibly be required to pay the tenant’s fees as well.

Once you have won the eviction case, you are still not done.

There will be a time set by the judge that the tenant must be out by, but if they’re not, you may have to contact the sheriff’s office to have them escorted off the property. That could cost you around $50, depending where the rental is located.

Once they’re out, the cleanup begins. It’s a fair bet that if you have had to remove a delinquent tenant that they will not go to any great pains to leave the rental in the same state that they found it in. There will be tenants that may even leave some of their possessions behind, and in many states you are not allowed to simply toss or sell these items. You are required to store them for a length of time in case the tenant comes back to reclaim them.

You will also need to change the locks, which can range depending on if you hire a locksmith or do it yourself. With storage fees, cleaning fees, locksmith fees, and any repairs that you have to make to damages done, even if you have a security deposit from them you can see how it starts to add up in a hurry, and that’s after the eviction judgement has been passed and you’ve shelled out potentially thousands of dollars to go to court.

Other Costs

Evictions are expensive, though it’s not limited to a monetary expense. If you are a single landlord without the support of a property management firm behind you, you may feel overwhelmed by the stressful situation.

Evictions cost time, energy, and they take focus away from other things that need to be done.

You will need to set aside time for collecting evidence, for the court date, and all of the other little details you will need to make sure you have put together. If you have never been through an eviction before (or even if it’s just been a while), and you choose not to hire an attorney to help, you will need to make sure that you take the time to thoroughly research the laws in your area or you may find yourself right back at square one, which as we mentioned earlier, will cost both time and money to go through the process again.

You may receive phone calls at all hours from frantic tenants that realize that they’ve let the situation go too far and are now angry with you or they may shut off communication altogether, leaving you to worry about the state of your rental that they are still living in. Even if they are difficult to reach, you’ll need to make sure not to harass them, though, or you’ll open yourself up for trouble in the eviction process.

 

What Are Your Options?

All in all, evictions are a nasty business. The tenant is being forced out of their home and you are being put through the financial and emotional stress that comes with an eviction and finding a new tenant to fill the unexpected vacancy. If there is any chance that you can avoid the eviction, you should.

The first step to avoiding an eviction is a thorough, detailed tenant screening. This should include a credit, criminal, and eviction report to give you a well rounded view of the rental applicant’s history and reliability. You should collect references from the tenant, verify employment and income, and watch out for the warning signs of a potentially poor tenant choice.

Once you accept a tenant that has been vetted, you will need to make sure that you have a solid lease. You should never allow a tenant to move in without first signing the lease with them, legally binding you both to the landlord-tenant relationship and safeguarding your business. The lease will detail out what is expected from both parties, including rent, policies, maintenance expectations, etc etc… If eviction becomes inevitable, a solid lease will help you in the legal battle.

Your diligence should not end when the tenant moves in. You will want to remain aware of any signs that could give you a heads up that your tenant will break the lease. If your tenant cuts off communication with you suddenly or you see signs that they are making a move long before their lease is up but they haven’t said anything, you’ll want to be ready.

There may be select times in which it is more financially reasonable to offer to pay your tenant to leave rather than go through the eviction process. Depending on the situation and how much the tenant is willing to accept to keep their credit history in a bit better shape, this can prove to be a reasonable option to consider.

 

Conclusion

In the end if the tenant is costing you money and won’t leave you may not be able to avoid an eviction. It’s part of the rental business and managing your own properties. The key is to learn from the experience. Your first eviction process may feel like you’re shooting in the dark, but it’s a learning experience. Take a deep breath, do your research, speak to other landlords that have been through similar situations, and seek legal advice if you’re unsure of something.

 

* Some local laws may stop you from accepting partial rent during the eviction press or supplimenting that lost rent by subletting any part of the property

Is Your Rental Ready for Winter?

It’s that time of year again. The temperatures begin to drop and you’ll see the first flurries of the season.

There’s a dusting on the roofs, on the grass, and on the tops of the cars left out the night before. The snow can be beautiful, but as more and more of it comes, it can cause a real problem, especially if you are a landlord and property manager.

As beautiful as snow – and even ice – may look from your window with the fireplace going behind you, it can cause some serious damage if you’re not prepared.

Even light ice and snow, if it sticks to more than rooftops and the grass, can cause slip hazards.

If you own an apartment complex or have outdoor stairs of any sort on the property, they could become very icy and dangerous, leading to potentially serious injuries if your tenant or a guest takes a tumble.

Locks on the doors and gates might freeze shut, making it hard or even impossible for your tenant to leave the property.

Piles of snow may also keep them housebound, if their car is snowed in or if the snow is piled in front of the door so that they can’t leave.

Water in the pipes that freezes may cause them to burst and too much snow on top of a roof can, eventually, cause it to collapse in due to the weight.

In the same way, branches become brittle with too much ice weighing them down and can damage cars, roofs, or passersby that are unlucky enough to be walking under at just the wrong time.

Don’t let the dangers of the colder months overwhelm you. There are precautions that you can take both before and after the snowfall to protect your tenants, your rental property, and everything inbetween.

Preparing for Snow and Ice

While you likely won’t be in the home when the freeze hits, as a landlord and/or property manager you can prepare your tenants to take care of the rental for you.

Your lease should detail out who is responsible for what.

If you own an apartment complex, you are likely responsible for de-icing stairways, common walkways, and possibly even a parking lot if you have it.

If you rent out a single-family home, your tenants will likely be responsible for these things.

Either way, it should be detailed out in the lease from the beginning so that everyone can be on the same page.

Make sure to check your local laws (both state and county) to ensure that your lease matches up.

One of the first things you should do as winter approaches is to schedule a time with your tenant to drop by the property.

You’ll want to check the furnace, the smoke alarms, and carbon monoxide detectors.

You don’t want the heat giving out during a snowstorm or find that a smoke alarm or carbon monoxide detector has gone bad the hard (and dangerous) way.

When you drop by, you may consider providing your tenant with a written reminder of their responsibilities for the colder months.

Include tips and tricks that you have learned over the years to better help prepare for it.

If the temperatures are forecasted to drop below freezing that night, leave the faucets dripping. That will help to keep water moving through the pipes so that they are less likely to freeze. It doesn’t do you or your tenant any good to have a frozen or burst pipe. You’ll need to call a repairman and, depending on the pipe that burst, they may find themselves without water for a short time.

You may also want to detail in this letter (especially if it’s the first freeze for them in the rental) what you will provide and what you will not.

If they do not have access to snow shovels, you may consider having one that you can lend to them.

They should keep salt, sand, or even kitty litter to help melt the ice.

If they’re looking for a quick way to remove large areas of snow out of your pathway, consider laying out a tarp down before the snowfall starts to catch it. If this is done over a walkway or driveway, it can be moved the next morning after a heavy, overnight snowfall.

Snow shovels and snow blowers will also help clear walkways and driveways after the snow has fallen and keep the snow from freezing to the concrete.

Check with them to see if they have experience removing the snow.

If you have a snow blower that you’ve left on the property for them to use, make sure they are aware of both how to operate it so that they do not damage the machine, as well as best practices to make sure they remove the snow efficiently.

The last thing they’ll want to do is battle a snow blower first thing in the morning just so they can get to work and end up late because they weren’t certain how to use it.

Ways to Help Your Tenant

When applicants come to look at your rental to compare it to others in the area, you’ll want to make sure yours stands out above the rest.

If you live in a location where snow can become a real problem, this is a place that you can shine.

Check out the following projects that you may wish to consider to make your rental property more desirable, especially during the long winter months:

  • Make sure all doors and windows are sealed. Drafts caused by loose doors and windows can drive the electricity bill for the property up as the tenants attempt to warm the unit.
  • Update out-of-date heating systems. If the heating system in your rental still works, but not efficiently, you may consider updating that system. Newer units are less likely to break down in the middle of a freeze, giving your tenants an extra layer of security.
  • Clear the driveway. There are a few options here. If you live close to the rental and you’re a do-it-yourself kind of landlord, you may offer to help them dig their car out in the morning. If not, you may wish to simply have someone on hand to call for that. While it’s a nice gesture to have a referral for this kind of work, you may consider paying to have this done, adding an extra perk to your rental that may not be provided with another.

Winter affects parts of the country very differently.

While rentals in New England may have already seen their first big snowstorm and expect more to come, rentals down in Texas may simply have to take a few precautions on the occasional overnight freeze.

You’ll want to approach your own rental with your local climate in mind, but regardless of where you live, there will be steps that you need to take to protect your rental and the tenants that live there.

Where to Start: The First Steps You Should Take as a New Landlord

As a first-time landlord, you want to get organized from the beginning to make your life easier.

Once you’ve decided to take the plunge into owning rental properties, your next steps will determine your chances of success.

1. Utilize Property Management Software

Keeping records of all your payments and expenses is an essential part of being a landlord.

Tax time will go much smoother if you have organized data, and you’ll be more likely to increase your deductions if you have maintained your records all year instead of scrambling last minute to find receipts.

You may also use property management software to advertise your property as available on listing sites, send and receive documents, collect rent online, and more.

It often helps you streamline your process and limits the number of programs you use to keep up with the aspects of your rental business so that things do not become mixed up.

2. Learn State Laws

Take some time to read the laws on tenant-landlord relations applicable in your state.

While this may not be the most entertaining reading you could do, it will help you know what is allowable and what isn’t.

You don’t want to accidentally overstep your boundaries because you weren’t aware of current regulations.

Always keep in mind that while some laws are federal laws and will cover everyone, there are often state and even city laws that you will be required to know as well.

Make sure that you do not cut corners when it comes to keeping up with the legal side of property management.

3. Inspect the Rental Property

While you probably had an inspection completed when you purchased the property, you’re now looking at it through the eyes of a landlord and prospective tenants.

Consider updates that need to be made to attract tenants and keep them long-term. Look at the appliances and think about replacing them if they are older and not energy efficient.

Make sure the carpet or flooring is in good shape and that all windows and doors work properly.

Take a look at the exterior as well.

The outside of the unit will be the first thing that the potential tenant sees when they look over the property, and their first impression may be a deciding factor if they apply or not.

It will be easier to rent your property if everything is in working order and not too old.

4. Meet the Tenants

If you’ve purchased a rental property that already has tenants, you’ll want to make meeting them one of your top priorities.

Introduce yourself and make sure they know how to contact you.

Let them know if any changes will be made in the near future.

Having a new landlord can be a frightening concept for some people and may cause them to look for a new place.

To prevent this from happening, take time to get to know your tenants.

5. Be Insured

If you didn’t get insurance coverage as part of your purchase, make sure you do it now.

You’ll want to protect your investment in case of damage.

You’ll also want to maintain liability coverage for your property for injuries or damage to tenants or guests.

Even if you obtained a policy when you were financing the property, you may want to review it now to determine if you need higher coverage.

Also make sure that you have the correct coverage.

Some policies are meant for property owners that live at the property and may not cover damages if you are not a resident in that home.

Check with your policy and make sure that it allows for renters.

6. Determine Maintenance and Payment Schedules

Now is the time to set up a business that’s efficient and productive.

Decide who will be responsible for maintenance — whether you’ll take care of all issues or hire someone.

Set up a list of contractors and companies to call for various issues, such as heating or air conditioning, plumbing and electrical problems.

When you work with one company, it will respond faster when you have a work order.

You also want to decide about payment.Set up a payment system that works for you and your tenants.

You may want to hire an outside company to manage payments and late notices.

You’ll also want to have an accountant to deal with your finances if you have multiple properties.

You may even find it beneficial for your accountant to take care of a single property if you plan to expand in the future.

Start out your business on the right foot, and you can eliminate many of the problems landlords face.

You can focus on keeping your tenants happy or finding new tenants and making money from your property.

Guide to Screening Tenants

Bonus: How to Read a Credit Report

Choosing a new tenant can be overwhelming, especially if you’re a new landlord or have had the same tenant in a property for several consecutive years.

It’s always good to remember that while vacant properties cost you money, delinquent tenants can cost you more.

While renters are looking for the right property to rent, as a landlord and property manager, you are looking for the right tenant for your property.

Not every applicant will be right for your property.

That’s okay. Don’t get discouraged.

A good game plan will help you streamline the process and take some of the stress of choosing a new tenant from the equation.

Screening a Potential Tenant

Tenant screening is an absolute must when you are looking for a new tenant to fill your property.

If you skip this vital step you are opening yourself and your investment up to terrible losses that could severely hurt your income.

Knowing who resides in your home begins with an application.

You may choose to use a physical version that you can hand to the applicant when you meet with them or, more likely, an online version that allows you to save time and paper.

Gathering application fees to run full tenant screenings on every single person that shows interest in your property can be difficult and time-consuming, so begin with a prescreening.

This begins with letting your applicants know what your expectations are.

Your listing should include information such as the rent rate, smoking policies, pet policies, and any credit/income requirements that you may have.

Letting your applicant know these things up front shows them that you are going to be honest with them and will allow them to bow out gracefully if they know that they will not be the right fit for your property.

You should have all of your policies in writing and they must apply to all residents that apply.

Sticking to your policies that you’ve created will help to hedge against appearing as if you are discriminating against an applicant.

Meeting an applicant face-to-face allows you to handle several items of business.

As the second round of prescreening, it allows you a chance to ask questions, give a quick tour of the property, and collect the application fee for the full tenant screening.

While this does not always hold true, if an applicant shows up late, does not have the full fee on hand, or is untidy in their appearance, you may think twice about them as a future tenant.

Do keep in mind that just because an applicant appears to be everything you’d ever hoped for, this is no reason to skip the tenant screening.

It is your first line of defense.

A full tenant screening should include a credit, criminal, and eviction report.

This will give you a fairly well rounded view of the history of person that wishes to rent your property from you.

You’ll want to watch for negative tradelines that indicate late or non-payments, as well as bankruptcies and collections owed on.

When you read over a credit history it is always a good practice to look at the details and not focus entirely on the score or recommendation given.

Verifying employment and checking with prior landlords are also part of the screening process, though a tenant screening company may not cover these.

Even so, if your applicant passes the credit, criminal, and eviction check, you still should not leave these two things to chance.

The sad truth is that people do lie about their income and past experiences.

An eviction may not be on the records yet if it is in the process of being filed for the property that they are currently in or the landlord may have decided to take another route that might not show on a typical tenant screening.

Reaching out to employers and asking for pay stubs help to give you peace of mind that the applicant is gainfully employed.

Checking with prior landlords (usually two or three back) ensures that they are not trying to slip past your safeguards.


If you’re on the fence between two or three qualified tenants you may have a difficult time choosing between them.

Some landlords are turning to social media for an alternative form of tenant screening, but you should always be careful with this.

While it may give you a great outlet to check on an applicant’s lifestyle – are they partiers? Tidy? Slobs? – and if they have any pets that they may or may not have mentioned to you, a landlord or property manager should tread carefully so that they do not appear choose one applicant above another using something that may be deemed illegal according to the Fair Housing Laws.

If you choose to take this route, make sure you are up-to-date with all of the laws associated with it. Social Media is a great tool, but you don’t want to risk landing yourself in trouble.

Follow the Law

There are local and federal laws that dictate the process that you will need to follow to find, screen, and accept a tenant.

While the federal laws will cover the country, you’ll also want to check in on your state, county, and even city laws to make sure that you are fully informed.

Ignorance is not an excuse that can be used if someone claims that you’ve broken the law as a landlord or property manager, and it can cost you in money, time, and reputation.

These laws are meant to help you both, so being fully aware is a must.

They are consistently changing and updating to meet the needs of landlords and tenants and better help to regulate that relationship.

The Fair Housing Act touches on situations from the moment that you start marketing your property and all the way into the actual tenancy and was put into practice in 1968.

It has been updated as different situations arise.

On whole, it’s meant to keep people from being turned away from housing based on race, color, national origin, religion, sex, familial status, or disability, though some local laws will add to these, so it’s best to make sure that you are well aware of all laws that apply to your property.

You will want to be very careful in how you word your advertisements for your properties as well as what questions that you ask those that apply.

If you even appear to be leading them in one direction or another – for example, indicating that an apartment close to the playground would be better for the applicants when you find out that they have children and not offering to show other properties as well – that may be seen as discriminatory.

Refusing a disabled applicant reasonable accommodations such as a service animal in a property that does not allow pets may also be seen as discrimination.

There are also exemptions to the FHA that might com into play.

Once you have found an applicant that appears qualified and has passed the pre-screening, you will need to receive permission to run a tenant screening on them.

While criminal checks are performed on public criminal records, it is a good practice to be upfront and clear with what kinds of reports that you will be running on your applicant.

You will need direct permission to run a credit report.

Some tenant screening sites make it easier on you by reaching out to the tenant directly for this permission, but you may consider keeping a signed permission slip on file for your records as well.

State-specific documents such as these are easy to purchase and download online.

Finally, once you have chosen the best applicant to become your tenant you will sit down with them to sign the lease.

This is a legal document that should always be signed by both parties before the tenant is allowed to move into the property.

The lease will dictate what is expected from all parties involved so that if there are any questions at a later date, you may refer back to the document. 

This will be one of the most important ways (aside from the screening process itself) that you’ll protect your property and your investment.

It legally binds you both to the promises made and will help to simplify your landlord-tenant relationship.

Conclusion

Finding that perfect tenant can be stressful, but you’ll find the policies that work best for you with each time that you go through the process.

Speak with other landlords and ask advice. While learning from your own mistakes is a necessary part of growing your business, learning from others so that you can avoid the mistakes that they made is even better.

Choosing a great location that will appeal to the types of tenants that you’d like to attract, going through a full and detailed tenant screening process, and abiding by the laws set up to govern the landlord-tenant relationship will help set you and your new tenant on a smoother path and encourage a great working relationship.

Bonus:
How to Read a Credit Report

When you open your rental property up to a person it is safe to say that you’d like to know that you are making the best choice in the tenant that you accept.

You have gone through the first steps of the screening process: you have asked the interested individual to fill out an application, have spoken to them briefly about their qualifications, and have collected the screening fee.

This process has likely helped to narrow your pool of applicants down to a serious few and now it’s time to look over their credit and criminal repors.

If you are a new landlord or are switching the service that you use to run tenant screenings, you’ll want to make sure that the tenant screening that you order provides, at minimum, a full credit report and a nation-wide criminal check.

Some HOAs that your property may be apart of may require a certain level of criminal check to be performed in order to rent to an individual within that community.

Overall, it’s safer to conduct a full, nation-wide criminal search rather than rely on your applicant to provide you with accurate information of the areas that they have lived in.

A credit report may include somewhat varying information, but you should look for one that includes a credit score, tradelines, and public records (which should also include collections).

Below we’ll go through what is included in each of these, as well as a few other options you may wish to persue in a credit history.

For consistancy’s sake, we will be using LandlordStation’s sample report, though if you pull a report directly from a credit agency it may be formatted differently.

Credit Score

A credit score is provided by the credit bureau that the report is pulled from. For LandlordStation, this is Trans Union.

There are three major credit agencies in the United States, and while those scores may differ slightly depending on the information found in the agency’s database, they should be fairly similar.

Credit scores tend to range from around 300 to 850, though 800 is considered near perfect.

The tradelines found below the credit score will detail out what information the credit bureau has used to formulate the score itself.

Most tradelines will affect the score up to seven (7) years and will affect it less and less with each passing year.

In other words, if the year is 2015 a negative tradeline from October of 2014 will weigh heavier against the credit score than a negative tradeline from October of 2010.

Score factors are often detailed out next to the score provided.

These are notes that the credit agency will provide that explain what went into their calculations.

There will be times that no score is provided.

If a score cannot be calculated, this often means that the individual does not have an extensive or recent credit history.

Individuals that pay in cash, do not use credit cards, and do not take out loans will likely have a very bare credit history and a score may not be available for them.

This does not necessarily make them a poor canidate, though you may wish to focus more on other forms of screening (such as references and their criminal and rental history).

If your applicant claims that they should have a credit history or they find a discrepency in the history that was provided, they should contact the credit bureau immediately.

Credit Summary and Tradelines

A credit summary will be where you will see the summarization of the different items found on the credit report. The tradelines will be the details of that summarization.

There are five (5) catagories under the summary on LandlordStation’s credit reports.

1.    Closed with Balance – This will be a summary of any tradeline that was closed with a balance still open. It may have been a loan or a credit card. The reasons that it was closed before it was paid off may vary, and those details will be found in the tradelines.
2.    Revolving – A revolving balance will change. This is not a set amount, such as a loan, but one that is often being paid on and added to such as a credit card. The important thing to note here is the percentage of the debt that is being used at any given time. A person who have been approved for $100,000 of revolving credit and is using $10,000 is in a much better position than one who is approved for $5,000 and is using all $5000 of it.

3.    Installment – Installment balances are lines of credit that will be paid in installments, such as an auto loan or a student loan.
4.    Mortgage – Lines of credit for a mortgage stand apart from other installments.
5.    Open – The open category is simply anything that is still active and has not been shut down either by the creditor or the invididual that the report is being run on.
Under the summary the individual and total amounts will be listed for the balance, high credit, and monthly payments.

Tradelines will provide details on the information under the credit summary.

Each tradeline (both open and closed) will provide information on the name of the creditor, the loan type (ie if it is a credit card, auto loan, student loan, etc etc), current rating (meaning if it is currently being paid on, if it is late, etc), the balance, if any money is past due, and what the credit limit is. It will also note the high limit, meaning the most owed on that tradeline.

This will include any fees associated with late dues.

Dates will be provided for when the tradeline was opened, closed, and also when it was most recently reported to the credit bureau.

Collections

Collections are lines of credit that were shut down by the creditor and the debt was sold to a collection company.

The collection company may be awaiting payment, and if so it will be noted in this section of the credit report.

The collection section of the credit report will note the name of the original company owed, the balance owed (this should be looked at for the current balance over the ‘past due’ section), the high credit, and the agency that currently holds the debt.

The collection will have a date opened section that will show when the tradeline was placed for collection, and if it has been paid and closed it will note that next to the open date.

If the collection shows a balance and does not have a paid or closed date, it likely is still an outstanding debt owed.

As of 2014 medical collections do not impact a credit score as heavily as other collections might.

Public Records

Public records will include any legal proceedings that affect the applicant’s credity-worthiness.

This may be a civil judgement, a tax lien of some kind, or any number of things.

These are all considered negative marks against the applicant’s credit history.

Other Options

Some credit reports will offer various other options such as previous address history, known aliases, and employment history.

This information can be vaulable when fact-checking your potential tenant, as they will often provide this information on the application that they bring to you.