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Rental Property Credit Checks

If you are a landlord seeking to build your wealth and minimize your problems, the key to success could be in rental property credit checks. Running credit checks on the potential tenants of your various rental properties enables you to avoid the hassles of a problematic tenant altogether or at the very least adjust the conditions of the lease agreement to compensate for someone who is less-than-perfect. As a landlord with access to credit checks, you can easily ascertain whether a tenant can be relied upon to pay rent on time, whether he or she has sufficient means to comply with the lease agreement and whether the potential renter has access to emergency funds, such as available credit, in case of unforeseen circumstances.

Regulation of Rental Property Credit Checks

Because rental property credit checks contain important financial information that can have serious implications for people, their use is highly regulated. The Fair Credit Reporting Act was recently established in order to protect people from misuse of their financial reports and to guarantee that credit information received by any requesting agency is accurate and complete. If you are a landlord, you need to know that credit checks are available for your benefit, but you must be careful in how you react to the information you receive.

It is easy to obtain credit reports, with many companies now offering their credit check services on the web. You can also take advantage of specific tenant screening companies that, among other things, obtain credit checks on prospective tenants and even interpret the sometimes-complicated information for you.

After you have received the credit check on your potential tenants, you may decide to refuse to lease to them, charge them higher rents, require a down-payment or deposit, or ask for a co-signer to vouch for them on the lease agreement. However, if you do respond to your tenant’s application in these negative ways, be sure to give him or her a notice clearly stating the name of the agency from where you obtained the credit check and his or her right to investigate and dispute the agency’s findings and analysis. Failure to do so can cause your careful tenant screening process to become a legal nightmare.

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