As a landlord, your business lives and dies on the ability and willingness of your tenants to pay in full and on time. Getting a credit check for renters you are thinking of contracting with could save you a massive amount of problems. It will also save you a huge amount of time and money. So how does this part of tenant screening work?
First of all you need to approach a credit reference agency for the credit check application. Now you can be quite ruthless and cunning at this point. First of all you can make it a condition of any rental application that the prospective renters pay an advance fee to cover the fee for the credit check for renters you are going to do. You will be required to pay a fee, but we will come back to that. Secondly you may put the responsibility on the tenants to get one and provide it too you. This is really no problem as it will effectively be a free credit check for renters who do this. Under Federal law the 3 big reference agencies such as Equifax have to provide you with your credit report once every 12 months upon request.
If you decide to do it yourself, you can usually order a credit check online where you will have to pay a small fee if you want it. It can also be delivered electronically to you as well. So with a few minutes on the PC you will probably know more about your renters than they know themselves.
What the credit report contains is the person's credit score and full credit history, along with know credit associations. This means there will be names of other persons associated with his credit. Whilst the score is important what is more important is the history. Whilst you can repair your credit score, it is hard to get rid of the recorded history. This will show you if the tenant has a poor payment or defaulting past.
So carrying out a credit check for renters is essential if you don't want to be left with egg on your face and a gaping hole in your bank account that should have been full of rent monies. Remember though to also carry out other checks on your renters backgrounds. Credit checking is just the first and quickest step to eliminate weaker applicants. It could save you a whole heap of cash if you do it.
Checking the credit of a tenant is one of the best ways to protect your investment and to insure that you have a good tenant. For more ways to determine if you have a good tenant click here or go to http://www.creditcheckforlandlords.org/.
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