Guide to Renter's Background Checks

Whether you are new to renting or not, you probably heard of a background check as a part of an application process. However, there might be some confusion for both landlords and renters alike as to why this is a necessary piece of the rental puzzle.

Thankfully, we’re here to help alleviate any skepticism and clear the air as we address what a background check for renters consists of.

What Is a Background Check?

First off, it’s crucial to have a basic understanding of what a background check is. Think of a background check as an x-ray print of a renter. Rather than just seeing what is on the surface or what renters tell landlords during the application process, a background check allows them to see more than what meets the eye.

Background checks allow landlords to take a closer look into prospective tenants to see some of their financial, criminal, and rental history that they might not necessarily be so inclined to share willingly on their own.

In short, a background check helps to raise any red flags to landlords who want to be wary of renting their property to problematic tenants.

What Does a Background Check Consist of?

So, what does a background check consist of? Well, each landlord can specify what details they want to be included in their background check for renters, but some basics should be covered, at a minimum.

While landlords can adjust their specifications, renters should anticipate background checks that cover their credit report, criminal history report, and eviction report.

Credit Report

Running a credit report on prospective tenants helps landlords get a better picture of that person’s financial stability and overall responsibility. How much detail a landlord looks into on a credit report is up to their discretion. For example, some might just look at the overall credit score of an individual, while others might look at more finite details within the report.

How to Pull Credit Reports

Some landlords will accept credit reports pulled by the tenant, while others will ask for permission to personally pull this information. Once again, this decision is up to the landlord.

Landlords and tenants can rely on these three major credit bureaus to pull credit reports:

• Experian
• Equifax
• TransUnion

For the most part, credit bureaus gather their information from the same sources. Credit bureaus develop a score and report based on individuals’ creditors, including their auto financing company, credit card issuers, and banks or credit unions.

Criminal History Report

In addition to requesting credit reports, landlords should also ask to conduct a criminal history report on any prospective tenant. Specific laws may prevent landlords from renting their property to formerly convicted individuals.

As a landlord, you must do your homework and determine if any of these laws are relevant to your situation. As a tenant, it’s a good idea to know these laws, too, if you have a criminal history of any kind.

How to Find Criminal History Records

Pulling a criminal history report accesses search records across the country at both a State and Federal Level. According to the Fair Credit Reporting Act, a thorough background check will gather an individual’s criminal records reportable within the last seven years.

Bear in mind that a criminal record differs from a criminal conviction and that a conviction will be reportable indefinitely.

Eviction Report

Another element of a background check that all landlords should have is an eviction report. As you can imagine, an eviction report lists any evictions an individual has had in the past. Generally speaking, evictions are a red flag to landlords for any prospective tenant.

How to Find Eviction History

Evictions are considered public records and will appear on your credit report. Therefore, any time a landlord pulls a credit report on a prospective renter, they should always watch for previous evictions.

Why Should I Conduct Background Checks?

As a landlord, conducting a background check is in your best interest for the sole reason that you want to do your best to protect yourself and your property.

The potential renter pool is vast for some, and having a background check can help narrow the options down to those who might be better renters in the long run. Even if the options are limited, it’s still a good idea to conduct background checks on any prospective renter, and here’s why.

To Understand Tenant Interest

One of the primary purposes of conducting a background check is to understand your tenant’s interests better. Ideally, you want to rent your property to someone who plans to use the space for living and abides by local and federal laws during their tenancy.

Unfortunately, there are particular renters out there who are interested in renting property to conduct illegal business. While we do our best to screen tenants over the phone and during apartment tours, we can’t always understand someone’s interest from these minimal interactions.

With the help of a background check, you can help to get a more precise picture of a prospective tenant to see if they line up with your ideal tenant.

To Protect Your Property

Ultimately, you always want to protect yourself and your property as a landlord. Things such as property damage, lawsuits, and evictions are all incredibly costly and detrimental to you and your property. Sadly, choosing the wrong tenants to rent to could potentially put you in line for any of these threats.

A background check helps you see deeper into a tenant and identify any red flags before getting yourself into a sticky situation. While not everything will become apparent through a background check, and some bad tenants are bound to slip through the cracks, these checks help to weed out the vast majority of headaches out there.

To Make the Best Decision

Lastly, conducting background checks helps you make the best decision regarding your prospective tenants. Rental properties take a lot of time, money, and effort to manage, and you want to make sure that you place someone into your home who understands and respects that perspective.

Final Thoughts

Again, your interactions with prospective tenants are relatively limited between meeting and signing a lease, so you need to find ways to get to know them better as renters. Background checks help you see if an individual is financially stable, responsible, abides by the law, and shows no eviction history.

Are you interested in listing your properties on Apartment List? List with us today!