There are several reasons for a landlord to conduct a background check on every prospective tenant. These checks can help determine whether a tenant will be respectful, safe, trustworthy, and able to make rent payments. They can also help spot red flags that might indicate a “bad tenant,” such as a history of violence that could represent a threat to neighbors or ruinous credit that may reveal a financial inability to make payments.
What does a tenant background check include, and how can this information help a landlord make smart decisions about who to trust?
At backgroundchecks.com, we team up with TransUnion—one of the three major credit reporting bureaus—to offer landlords a convenient online system for tenant background screenings. This service, called SmartMove, includes the following elements in each background check.
- Credit Report: Credit scores and credit history are important considerations for landlords seeking reliable tenants. By showing payment history, credit utilization, credit availability, and overall credit score—among other factors—a credit report gives a landlord a sense of a prospective tenant’s financial reliability. A bad credit report might indicate a tenant who won’t be able to make payments on time while a strong credit report helps dispel financial concerns.
- Income Insights: In addition to understanding their credit, landlords like to know that their tenants are gainfully employed or have a stable income. An income insights report can show the landlord how much money a prospective tenant makes per month and how large a percentage of that income would be taken up by rent. A lower rent ratio is more manageable for a tenant, which can instill confidence in the landlord. Higher rent ratios may indicate a tenant who is trying to rent outside of their financial means.
- Criminal History: Criminal history checks can help landlords protect themselves, the property that they own, and other residents in their building or in nearby properties. A prospective tenant with a history of violent crimes or sexual offenses may pose a threat to residents and neighbors. A landlord might also reject a tenant who has been convicted of serious drug possession or methamphetamine production to avoid a situation in which their property is used for this damaging and dangerous process. For these reasons and others, criminal history searches are an important component of any tenant background check.
- Eviction Reports: Rental history is another important component of the tenant background screening process. A tenant who has been evicted from a property in the past may be a risky bet for a landlord. In general, rental history can be a good indicator of the kind of renter a tenant will be. Evictions are black marks on this record.
In addition to these screenings, a tenant background check might include reference checks (including communications with old landlords), address history checks, and alias checks. The latter two searches can help flesh out the criminal history screening process significantly by helping tenants to ensure that they are pulling background information for the correct individual in the most relevant geographic regions.
Are you a landlord looking for a way to vet potential tenants? Try SmartMove today.
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.