Renters Credit Check
Tenant Screening and Its Critical Ingredients
Renters credit check is highly significant if you are aiming to have the rent paid by your tenants on time without hiccups.
Attracting the best possible prospective tenant is the first step to selecting the best possible tenant.
Well, the type of prospective tenant you attract is largely contingent on a number of factors.
These factors basically include the rate of rents,neighborhood, unit mix and your marketing methods.
As far as I know, to attract a prospective tenant, one should note first that the relationship between a landlord and a tenant must be cooperative, and not adversarial.
Much like a shopkeeper and his customer,a landlord and his tenant want to establish a long term mutually beneficial relationship.
It must then be based on respect for every person’s privacy, property as well as the right to profit.
However, one should know that besides a professional image, nothing should be more important than your intuition or gut reaction about a prospective tenant.
Unfortunately, relying mainly on your perceptions or worse yet a manager’s first impression is no way to run a business. It is even more no way to determine who will be a responsible tenant.
Oftentimes, the tenant may appear to be more financially capable and more substantial than he truly is.
With this fact, perhaps the best tip that I can give you is to always check your prospective tenant out no matter what your gut reaction is about.
Application: The Backbone of Tenant Screening
As often said, the application is the backbone of tenant screening.
It is particularly designed to force a prospective tenant into providing the most vital information accurately.
It asks the applicant the most important questions, but much to it,an application has been created to eliminate any possibility of errors or omissions.This even minimizes confusion.
Having said all these, a proper application form must then be used. Perhaps the secret to reading a prospective tenant application is to determine inconsistencies.
Essential Factors for a Successful Tenant Screening
There are several factors that are mandatory for a successful tenant screening.
These include the name,social security numbers, birth information, driver’s license, address, banks and savings accounts, etc.
Since, they are crucial to the success of a tenant screening,then there’s no reason for us not to consider them.
Let’s take a look at each of them.
Name is the most obvious criteria for tenant screening. However, this is often left partially incomplete.
Well, one specific rule to note when considering a background check, like tenant screening, is to provide a full,complete and current name.
This is mandatory for every resident.
And, since the main presumption is you may have to ultimately sue for possession and back rent, it must be clear who the responsible parties are.
So, when reviewing the name block on the application, make sure that it is properly spelled and a middle name is included. Also, make sure that the nicknames or aliases are also included.
If for instance, a female tenant is the applicant, it is necessary to obtain her maiden name as well as any former married names.
Obviously, this will help you to obtain the proper screening report on the right person.
Besides the tenant’s name,the name and complete identification of the children and other occupants also play a very important role.
As you may know,children may move in as minors, but time will come that they may be evicted as adults.
In addition to this,complete names of children may be a big help for you later,especially when you are trying to find out delinquent tenants for collection purposes.
Be sure the name of the primary tenant is clear as to generation and gender.
Note that confusion, whether it is intentional or not, is one of the most significant factors when evaluating a prospective tenant.
Thus,if certain confusion appears,particularly over generation, it should be clarified between junior or senior or a II or III generation.
As to gender,it is not always clear if the delinquent tenant is male or female.This can also be of great help for a private investigator researching a debtor’s assets.
Here are other possibilities that may create confusion:
Use of a nickname in the name block.
Inconsistency of the surname.For example,if a child from a previous marriage is included as a tenant,his or her surname may not be consistent with the name of the adult applicants.
Clarifying the origin of the child’s surname may help you locate a delinquent tenant at a later date.
There are some instances when an unmarried couple uses the same surname on an application to appear married.
If you know a couple doing this, see if the surname is consistent with the accompanying documentation.
Moreover,if you are dealing with a commercial property, be sure that all of the various business names,fictitious business names,DBA’s,and corporate names are included along with the responsible individuals.
Note that all of the business names used by the individuals can be verified through public records or perhaps through an information provider.
Social Security Number
Other than the tenant’s name,the social security number has long been deemed as the most important piece of information required for tenant screening.
So if possible, try to confirm the social security number by checking and cross-checking as many ways as possible.
If the SSN is available, ask for the SSN of your prospective tenant and compare it to the number provided on the application.
Be careful though to check for transposition of numbers, as well as for inconsistencies with the name.
One particular hint here is to look for an application form that breaks down the social security number into three groups.
Experts often say that this will likely minimize the possibility for errors,omission,as well as transpositions of the social security number.
Ask for the prospective tenant to give you a copy of his or her pay stub or his or her most recent W-2 Form.
Then, compare the consistency of the social security number with the one indicated on the application.
Once you are satisfied with the evidence, showing that the number provided may be legitimate, it’s now time to examine it even further.
While a number of people may not be able to give you with a copy of their social security card,always note that a counterfeit social security card can now be bought for as little as $40.
The next step to take is to understand how to read a social security number.In the first place,a social security number is always broken into three sets of numbers.
Except of a few numbers issued to the military during the mid 1970s, all the social security numbers contain the digits.
Those that were issued with ten numbers all start with zero.The first three digits mainly indicate where the card originated from.
So, if for example, a number originates from Montana and the prospective tenant shows previous addresses from New York and Florida,then claims to be born in Texas, and is now applying to rent your apartment in California,then there may be a problem.
If this kind of situation occurs,you must be smart and play detective. You can ask the prospective tenant what particular state they received their social security card.
Furthermore,if you have a prospective tenant who provides you a social security number with the area number not corresponding with any of the fifty states, assume that this is a fraudulent social security number.So send that tenant on his way.
• Date of Birth – Although a fairly simple request,the tenant’s birth date is often incomplete and inconsistent with other information.
It is then necessary you obtain a complete date of birth – of course with the month,day and year.
This is very important as very often this is the only thing to differentiate people with similar or common names.
Another thing is that, be sure that given date is consistent with all other information. If possible, compare it to a driver’s license and any other information available.
Place of Birth – This is but another important thing to consider when conducting tenant screening.
The city and state or county of origin is very critical for verification as well as additional cross checking,or for other evidence.
One should always remember that every piece of information must be consistent with every other.
The tenant’s birth place may reflect an inconsistency with the origin of the social security number or list of previous residences.
And, an accurate and complete birth place will help you locate relatives in case the need arises to locate the tenant for collection purposes.
• Mother’s Maiden Name – Along with the date and place of birth, the mother’s maiden name can also be useful in determining the tenant’s consistency and honesty.
It is often said that knowing a mother’s maiden name can be the most important piece of the puzzle when searching for assets.
Of course,it helps you to confirm the applicant’s background,but more to it, a mother’s maiden name may be the difference in finding out assets and detecting fraud.
Note: Bona fide picture identification is a crucial part of an application package.Well,typically, a driver’s license is the easiest to obtain.
Outside from the apparent advantage of a photographic comparison with the prospective tenant,a driver’s license is a wealth of additional information to help with cross checking for accuracy.
It is even more useful for locating the tenant in the future.
Here’s what you can do:
Cross check the complete name on the license with the name on the application and other information provided.Just find out is the name is the same,if it is spelled the same,or is the middle name or initial the same.
Cross check the address and date of birth with the application and other identification.
This is to insure consistency. Along with this, be sure that the physical description approximates the photograph and describes the prospective tenant in front of you.
• Note that the driver’s license number is the most necessary piece of information on the license.So,if a photocopy machine is not available, be sure that the number is included on the application.
Note that the driver’s license number may also be an excellent tool to help you locate a bank account in case there’s a need to locate assets for collection purposes.
On the most basic,the importance of an address history cannot be over stated.
When it comes to fraud detection,confirming an address history at the period of tenant screening may be the one fact that cannot be recreated from the person whose identity may have been stolen.
If for instance you suspect that the address history of your prospective tenant is inconsistent with the other documentation provided by the applicant, then simply ask for copies of the tenant’s old checks, tax returns and other evidences that could confirm the given addresses.
In addition, the screening report should provide an address history which is consistent with that indicated on the application.
Now,if the address history provided is accurate, then such information may be very helpful to an investigator searching to locate an evicted tenant.
Bank and Savings Account
Experts often say that a prospective tenant who does not have a checking account is red flag,something that needs immediate action.
He is probably a very high risk tenant. There is a possibility that they could not obtain an account due to improper identification, illegal alien status or other account was closed by the bank for bouncing too many checks.
So, landlords must beware.
Assuming your prospective tenant has a bank account, try to check it out.What you can do is call the bank to confirm the funds and then ask for an account rating.
Most banks will actually indicate when the account was opened, the range of their average balance,and then cross check if the check they have given you is good.
Never let them move in until you have obtained this information.
One thing to note here is that the existence of a bank account is an indication of stability and responsibility.
It is also an indication of where to proceed to levy money in case the tenant gets evicted for defaulting on the rent.
So if possible,confirm the bank account information every month when the rent is paid.
This will ensure that your records are always kept current and will even flag a possible adjustment in responsible parties.
When we say employment, we are somehow referring to the source of income.Accordingly, the source of income insures your security in renting to a prospective tenant.
So, the first step that you can take is to be sure that the complete company name, address and phone number is given.
Also,the supervisor’s name,pay rate,and the length of term of employment are all important pieces of information that must be checked and confirmed.
And, if your tenant works for a smaller company,it is equally important to confirm his employment.
If your tenant claims to be self-employed or an independent contractor, simply ask him to present some proofs.
Ask for a license or a business card, and check with the governing agency or private information provider to find out if the license is active and in good standing.
Knowing the rising crime in urban areas, the property owners must then be concerned with introducing a dangerous or undesirable tenant into their building.
As a property owner, you must protect your prospective tenants as well as your investments.
There are also some criminal records that you can access for tenant screening.
Nearly all of them are public and perhaps the easiest way to access them is through your tenant screening provider.
Your provider may access information from different depositories throughout the country.
However, before ordering a criminal background check on a prospective tenant,it is somehow important that you have sufficiently checked the application.
Once you are satisfied with the information given,you can request the criminal background check from a certain county or state.
Finally, obtaining references on a tenant application is vital for a number of reasons.
At first glace,references may seem worthless, unless they are checked out. As far as I know, the most important reference is the current or previous landlord.
So if your prospective tenant is moving across town or country,they must have lived somewhere else.
Call the former landlord and ask about the types of tenant they were, including their payment habits,and if they did the rules and respect the property.
Other useful references could be the tenant’s friends and relatives.They are equally important in the event of an emergency or need to locate the tenant after they have moved out.
These references are also the key to any collector performing skip tracing on a tenant that left owing you money.
So those basically are the most important ingredients of a successful tenant screening.
The most important thing to consider in general is to make sure if all the given information are accurate,consistent and reliable.
As a landlord, you must then be very smart and learn to play detective.
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