Are you a new landlord putting together an effective tenant background screening policy or a long-time landlord revising your tenant background checks? In either case, consider the four tips below your best practices for smart tenant screening.
- Familiarize yourself with all laws and regulations
The single most critical thing to remember with tenant background checks is that you don’t have free reign. There is considerable debate about the ethics of tenant screening, including whether landlords should be allowed to consider criminal history and other background information during the tenant application process. In jurisdictions such as Seattle and Detroit, there are now ordinances that restrict which background checks landlords can run on prospective tenants.
As a landlord, you need to familiarize yourself with all relevant legislation. Don’t forget the Fair Credit Reporting Act, which outlines the protocols that you must follow when conducting any tenant background screening.
- Plan a compliant and relevant background check
Once you know what you are legally allowed to do with your tenant background checks, you can begin crafting a tenant screening policy that is detailed, relevant, and fully compliant. Regarding relevance, you will want to focus on categories such as criminal history, credit history, employment, identity and address history, and rental history. Other background checks, including driving record checks and education background checks, are not relevant to housing situations—skip them.
- Look beyond the credit report
For many tenant background screenings, landlords emphasize the financial situations of would-be tenants. While employment, income, and credit history can speak to a tenant’s likelihood to make rent payments consistently and on time, landlords should avoid putting too much weight on the credit report.
Bad credit can result from many different factors. Especially after a year as unusual as 2020, during which many people lost their jobs and found themselves in difficult financial situations due to COVID-19, landlords should not penalize prospective tenants for past financial mistakes or unavoidable periods of economic struggle.
A better option might be speaking with past landlords and other references to get a sense of a tenant’s character and reliability. These personality traits often contribute more to the behavior of a “good tenant” than spotless credit.
- Don’t overlook spouses and partners
Often, when couples apply for housing together, one member of the couple does most of the interfacing with the landlord. In these situations, remember that you are considering two different tenants—not just one. Running a background check on only one of the prospective tenants leads to the risk of overlooking a red flag in the other person’s background. Vetting the two tenants identically will give you the information that you need to make a smart leasing decision.
At backgroundchecks.com, we are happy to help you put together an effective strategy for tenant background checks. Contact us today to get started
About Michael Klazema The author
Michael Klazema is Chief Marketing Technologist at EY-VODW.com and has over two decades of experience in digital consulting, online product management, and technology innovation. He is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments.