April 30, 2008
Credit Reports for Landlords
Landlords, especially smaller ones, are having more trouble these days checking credit reports on their prospective tenants.
The reason is that the 3 national credit bureaus, Experian, Equifax, and Trans Union have tightened up their requirements that allow tenant screening companies to open accounts and supply credit reports to landlords, property managers and property owners.
Now days it is likely that landlords will have to comply with the following requirements to open an account at a tenant screening company to get rental credit reports:
- have a state issued business license
- have a dedicated office to conduct business with a business phone number listing
- have an onsite inspection of your office by each of the 3 credit bureaus, and
- sign contracts that require compliance not only with the latest provisions of the Fair Credit Reporting Act but also with the more restrictive requirements imposed by the credit bureaus themselves.
Also note the onsite inspections will not always be cheap, sometimes costing $50 or $100 for each credit bureau, plus in most cases a landlord will need to pay a setup fee to open a new account at a tenant screening company.
So what is a small landlord to do?
Option 1.
Accept a Tenant Screening “Report that does not include a credit report
Such a Tenant Screening Report may be based on the minimum criteria that you will accept for an applicant taking into consideration an applicant’s credit score, public records, bankruptcies and collections.
One company that offers small landlords this type of tenant screening report is E-renter.com.
Option 2.
Ask the prospective renter to bring you a copy of their own credit report. The prospect can either get their credit report through this site Creditreporting.com (get a credit report from all 3 credit bureaus for $29.90, or get a credit report and score from one credit bureau for $14.95. Or the rental applicant can go to the free AnnualCreditReport.com site that allows consumers to get their credit report once a year - how to get your free credit report.
Or consumers can even get free credit reports from all 3 credit bureaus as part of a trial subscription to credit monitoring.
Once the consumer provides you with a copy of their credit report and proper identification, you can either have a tenant screening company do the other useful background checking steps (verify current and past employment, verify rental history with previous landlords, etc.), or you can do the verifying yourself.
