An Overview of the Landlord Background Check Process

 

Rental background checks help landlords screen potential tenants, find red flags, and pick the best tenant. The background check usually happens alongside a credit check after a prospective renter fills out a rental application. You can expect a background check to:

  • Confirm the renter’s identity
  • Assess criminal history at the federal, state, and county levels
  • Scan the sex offender registry
  • Check for prior evictions

Please note tenant background checks and rental background checks are used interchangeably in this article.

Why should I screen renters?

If you want to find a great tenant who pays on time and respects your property, then you should make screening a part of your process. Here are some reasons to run a background check:

  • Avoid Nightmares. Tenants with several evictions not only cause headaches and hassle, but they also cause wasted time, lost rent, and property damage.
  • Avoid Liability Lawsuits. Tenants with a violent criminal past could harm someone on your property, and you could be named in the lawsuit
  • Deter Identity Thieves. Prospective tenants who won’t submit to a background check may have stolen identities.
  • Prevent Sex Offender Lawsuits. Tenants who are registered sex offenders could cause you to get sued if your property is too close to a park, school, or other places children visit.
  • Waste Less Time. Prospective tenants who submit to a background check are serious applicants and are more likely to start the relationship with honesty and transparency.

The Rental Application: what do I need to run a rental background check?

Whether you use an online or old-fashion paper rental application, your process should be the same for all tenants. Consistency across the board helps you follow the Fair Credit Reporting Act (FCRA) guidelines, the Fair Housing Act, and HUD. It might be smart to have an online application, so you are not responsible for sensitive personal information.

Typically, you’ll run the background and tenant credit checks at the same time, so your rental application should include:

  • Full legal name
  • Social security number (SSN)
  • Date of birth
  • Residential address for a minimum of the past two years
  • Current landlord
  • Current employer
  • Written consent to run criminal background and credit checks

Is it legal to run a background check on tenants?

Yes, it’s your right as a landlord to screen applicants. As mentioned above, you must do so consistently for all applicants.

You should have a separate document that obtains written permission. Inform the tenant you’re running both state and federal criminal background checks and a credit check too. Before taking payment, you should make the prospective tenant aware of all application fees.

What shows up on a tenant background check?

The background check should confirm the renter’s identity and social security number, notify you of any criminal history, and shed light on eviction history. This section will touch on credit too, which may be a joint report or altogether separate, depending on the service you use.

Social Security Number Check

The SSN check will give you the names linked to the tenant’s social security number as part of the identity verification. You can expect to find details of the location and initial date of the SSN. If the tenant made an error or supplied an otherwise invalid SSN, that info falls under this check.

Criminal Background Check.

The criminal background check should show you the criminal records at the federal, state, and county levels. You may even find an international watch list reach for crimes such as terrorism, drug trafficking, and more.

Credit Check, Credit Report, and Credit Score

The credit check might be included with the background check or be a separate fee. You can get a full credit report from either of the three major credit bureau: Equifax, Experian, and TransUnion. Experian, says as of 2019, the average credit score (FICO score) in the US was 703 or greater. Good is anything above 670.

Don’t let scores from the credit history reports be the only factor, as “applicant a” can have good credit and a lousy income to rent ratio, while “applicant be” has a slightly lower score but better ration. Many landlords will pass on tenants when the rent would be over 30% of their income.