Benefits Of Conducting A Credit Check On Prospective Tenants

When renting out a property, it is important for a landlord to hire appropriate credit and background check services in order to check the credibility of the prospective tenant.

Steps to be taken before a credit check

Before providing landlord credit check services, most companies obtain permission for credit check and rental application from the prospective tenant. A form is provided to the tenant wherein he is required to fill in details like name, date of birth, social security number, contact information of previous landlord and the previous address. The form also includes a statement regarding the purpose of the credit check and a field wherein the tenant is required to sign and hence give consent for the credit check. A fee may also be collected from the prospective tenant to cover the expenses involved in the credit check.

Factors to consider in a credit report

A credit check of the prospective tenant will allow you to generate a business credit report. Certain factors must be considered in the credit report.

Negative items

This may include information regarding due and discharged accounts.

Foreclosure on a home, eviction or bankruptcy

This part of the report may focus on the negative aspects like foreclosures, eviction and bankruptcy.

Individual loans and credit accounts

This part of the report enables you to review the account of the tenant for late payments. It gives details about late payments, their frequency and the time duration for the late payments.

Analysis of credit report

A credit report can help you predict the future behavior of the tenant. If the tenant has a history of late payments or not paying rent, it is a possibility that he may continue the same behavior in the future. This can enable the landlord to decide whether to rent the property to the tenant or not.

However, it is also important to look at the positive aspects in the credit report. If a tenant had filed for bankruptcy a long time ago but has ever since been regular in payments and has managed to improve his credibility, landlords may considering renting the property to such tenants.

About us:

AAA Credit Services is a well known name in Houston and surrounding areas for conducting all types of background checks and generating credit reports. We also conduct driving records check and employment screening services.

Landlord Credit Check – An Essential Step to Safeguard Yourself From Financial Losses

Landlord credit check services are utilized by landlords who are willing to rent out their property to tenants. A credit check of the tenant is highly recommended as in case he fails to pay rent, or damages the property, it may cause a financial loss to the landlord. Most landlords use credit check services to ensure that the tenant is responsible and capable of paying the rent.

Aspects considered by landlords while using credit check services

Most landlords, who use credit check services, focus on the following aspects:

Predictability

While using credit and background check services, landlords usually check the tenant’s credit report to evaluate his stability, predictability and consistency regarding payments. Consistency is aimed at the evaluation of the payments made by the tenant in the past. Stability focuses on evaluating and determining the nature of job of the tenant and his past payment history. A tenant who possesses a good track record of fulfilling his financial obligations on time and has a permanent job is considered stable.

Rental History

Landlords use credit check services to gather information about the past rental history of the tenant. The past rental history can determine the paying capacity of the tenant. The credit check can also be used to ascertain if the tenant has defaulted in making rental payments to previous landlords. This can help the landlord evaluate the reliability of the tenant.

Debts

The debt condition of the tenant can affect his capability to pay rent. Hence it is important to seek businesscredit report of the tenant. It is advisable to ensure that the tenant possesses the capability to pay rent along with the other financial obligations that he may have. The credit check enables the landlord to know the debt load of the tenant.

Bankruptcy

Landlords can check credit reports of tenants for bankruptcies. If the tenant has a pending bankruptcy, the landlord may decide against renting the property to such an individual. In case of a pending bankruptcy, the tenant may be relieved from his current financial obligations. This can also include the rentals due. This can cause financial loss to the landlord.

About us:

AAA Credit Services provides services relating to credit reports, tenant screening, employment screening, generation of business credit reports in Houston and the surrounding areas. We offer customized solutions and are experts focus on catering to every requirement of our clients.