New and inexperienced landlords or landlords who have a great first impression of their potential tenant may question the need for a credit report. It takes time and money and may ask, "Is it really necessary?"
Absolutely! This is not a place to cut corners. A credit report gives you a host of valuable information about your potential tenant. This information goes beyond a name, a W2, and a good first impression. It gives you a picture of the tenant's payment history and uncovers any red flags that may exist. A credit report helps protect you and lets you be more confident when deciding to rent to a tenant. Besides, the fee is usually quite small and you can pass the expense on to your tenant. Most tenants expect this now anyway and if a tenant has a problem with your obtaining a credit report they probably wouldn't have made great tenants.
What if a tenant presents you with a copy of his or her credit report, saying it was just run? Should you accept the report or insist on running your own? Well, it's up to you, but taking the tenant's word for it is risky. Unfortunately, fake credit reports are widely available and landlords fall victim to this all the time. So insist on a credit report from a trusted provider. If the tenant refuses this request, you may be better off without him or her. (But check the laws in your state - some require a landlord to accept the tenant's report if it is less than 30 days old.)
An excellent option to avoid potentially fake credit reports and still let your proactive tenants pull their own reports is to refer them to a self-initiated sceening service. In this unique model, the tenant pulls (and pays for) their own credit report and then simply gives permission to the landlord to view it - thus eliminating the possibility of modifying the data.
Once you have the credit report, how do you make a decision? What constitutes an acceptable credit score? What are you willing to accept - or not? For starters, look beyond the score itself. What factors have played a part? For example, late payments on medical expenses might not be too much of a risk - unlike eviction from a previous rental property. Decide what you criteria are, and stick to them across the บ้าน มือสอง board to avoid legal issues.
It's up to you to decide your standards for accepting a tenant. Talking to other landlords can help. Learn what has and hasn't worked for others. Some things are acceptable to some people but not to others; determine what will work for you. A credit report can go a long way toward helping you get to know someone and making a decision to accept or deny them as a tenant.
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