Many landlords run background checks on their tenants. In fact, it’s become such a common p0ractice that is has spawned an entire industry of specialist background services. Naturally, you want your rental to be as risk-free as possible, but you can never guarantee that a resident isn’t lying to you. Indeed, it’s quite common for tenants to lie – around 23% of renters admit to lying to their landlord about having pets. Secretly having pets may seem relatively harmless, but they can potentially cause a lot of property damage. Tenants can also lie about their financial situation, which could lead to unpaid rent. That’s why so many landlords turn to background check services as in the long run they save time and money.
Types of Information Collected in a Tenant Background Check
Most tenant background check services provide the same kind of information, although some may be specialists in certain areas. Here, we’ll go through the main types of information you’re likely to find.
Credit Reports
It’s important to know that your tenant will actually be able to pay the rent. One good indicator of this is a credit report. Not every service provides this, but it goes without saying that someone with a very low credit score will be more of a risk when it comes to missed payments.
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Eviction History
If someone has a past eviction it could just be bad luck, but if there are multiple instances then it can be a red flag. Unless the tenant’s record is completely clean you may want to do a little more investigating.
References
As we mentioned above, there are times when you want to dig a little deeper. A great way to do that is by finding any past references from previous landlords, which could provide you with vital information.
Criminal Records
One of the key aspects of running a background check on tenants is to find out if they have a criminal record. You’ll also be able to find out more details like whether it’s for a minor violation or something much more serious. Background check services will also see if your tenant appears on any sex offender registries.
How To Conduct a Background Check on Tenants
Before you think about running a background check on a tenant, there are some important steps you need to take. The first thing you need to do is have your tenants fill out an application form. You can include questions like whether the tenant is a smoker or has pets – something that may be verifiable from a previous landlord reference. You can also include questions about criminal or eviction histories, which can also be checked later.
As well as an application form, you could also interview your potential resident either face-to-face or remotely. This is a good way to build rapport, get direct feedback, and get a better feeling overall of what the person is like while still being able to ask pertinent questions. An interview is also an ideal time to get authorization to conduct a background check. This is incredibly important as it means you have the tenant’s permission to check on their credit report and criminal history.
How To Choose the Best Background Check Services for Landlords
Now that you have your tenant ready, it’s time to choose a background check service. Luckily, there are plenty of options to choose from, but you need to decide what matters most to you. First, consider what type of information is a priority. For example, some services really delve deep into a person’s history going beyond eviction data and criminal records and including whether they’ve filed for bankruptcy in the past. Some background check services are also FCRA-compliant, so you’ll know the company is regulated. This means you might have to rule out some of the more well-known all-purpose background services like Instant Checkmate, Spokeo, and TruthFinder.
Then there are some more practical considerations to take into account. One of those is speed – how quickly do you need your background check? Many services produce instantaneous reports – others take longer to process. Finally, there’s the price. It’s not just about the basic package costs, you also have to take into account any additional costs. For example, some tenant background check services charge extra for a criminal record search of eviction data, while others include it in their flat fees.
Recommended Background Check Services for Landlords
With so many different background check services out there designed especially for landlords in mind, it can take hours to find the right one. Here, we’ve highlighted three of the best on the market to help you find the best solution for you.
SmartMove
While everyone knows TransUnion, you may not yet have heard about SmartMove, one of its services that aims to make tenant background checks easy through lightning-quick screenings. As you would expect from one of the three major credit bureaus, generated reports are comprehensive, and you can rest assured you’re getting reliable, Fair Credit Reporting Act (FCRA)-compliant data. You also get state and national criminal records, including results from most wanted databases and sex offender registries. On top of that, SmartMove offers unique features such as ResidentScore – predicting rental performance with a score ranging from 350 to 850 – and eviction, as well as income reports that can easily predict the likelihood of eviction and whether the tenant is able to consistently pay rent.
RentPrep
As a self-described “community-driven tenant screening service” RentPrep prides itself on creating a community for landlords to come together, with an active Facebook group filled with thousands of landlords. The website also includes a wealth of resources, including a blog and podcast. Importantly, RentPrep does great background checks too. The service provides a full credit report with the tenant’s credit score. You’ll also get access to Social Security number verification, eviction reports, past bankruptcy filings, and address history. Of course, there are criminal record checks too, with RentPrep searching nationwide for criminal histories – including sex offender registries. Conveniently, RentPrep gives you the choice of either paying for the background check yourself or have your tenant pay.
LeaseRunner
LeaseRunner aims to make your life easy by offering tenant screening aimed at small landlords and agents. The service covers criminal, eviction, and credit reports. With LeaseRunner you can also build an in-depth financial profile of a tenant that ensures they’re able to pay rent. This is financial profile gives you a 90-day history including deposits, withdrawals, available balance, and an overall average. The criminal background check is similarly detailed, covering every state and checking sex offender registries, incarceration records, prison records, warrants, and even traffic records. Each background check has a flat fee that can be paid either by tenant or landlord.00
Best Background Check Services of 2023
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