Credit Checks: The Basics

When most people hear “credit check” they think of the major credit reporting agencies like Equifax, Experian and TransUnion. If you own several rental properties and will be running credit checks fairly often, it might pay for you to join one of those agencies for a nominal annual-fee which will lower your costs in the long run. There are other ways to screen tenant’s credit worthiness, particularly those who don’t have significant credit histories. Landlords should use every resource available, including their own time and legwork to screen potential tenants extensively.

Credit checks from the big three mentioned above can be had for less than ten dollars. You can also search public records for evictions or criminal records or hire a tenant screening company to do that for you usually for around twenty bucks. Another way you can check on credit history is to call previous landlords and see if they paid their rent on time and how well they kept up their apartments. If someone approaches you about a rental and you find they have a record of eviction, then all the more reason to screen their recent credit history very carefully.

The more completely you check out your potential tenants the more you avoid future problems. It’s that simple.