Why a Tenant Background Check is So Important
Identity Theft is absolutely rampant. According to security firm Lifelock.com, this type of fraud is the number one most reported financial/property theft in the US. Since the early 2000s, 37 states have created legislation outlawing “Identity Theft” as a separate, distinct crime. ID theft is now a $21 billion business, and says nearly 7 percent of American families are victimized every year and those numbers are growing, reports StatisticBrain. How does your tenant know the guy next door is not an escaped convict, a convicted armed robber, sex offender/child molester or murderer?
Your first concern, as a landlord/property manager is whether an applicant is a “good” tenant: someone who pays the rent on time, doesn’t tear up the property and doesn’t cause problems for your other renters. The American Apartment Owner’s Association (AAOA) says the best way to insure your applicant doesn’t have a history of bad tenant behavior (and if he’s not an escaped convicted serial killer) is through a tenant background check. You can do a limited check of somebody’s background yourself, but to get an accurate, in-depth and broad-based report on every possible aspect of the person’s life, you’ll need to buy a report from one of the thousands of background screening services in the market.
A Complete Background Check Report
Within a complete professional Background Report, there are numerous component reports that most screening services, such as RentecDirect.com, allow you to order a la carte. Here are the most common reports that generally cover the needs of property managers:
By far the most requested report and probably the most useful, the Credit Report comes from three leading credit monitoring agencies: Equifax, Experian and TransUnion. Lenders, Creditors, Landlords and a myriad of other interested parties periodically report their debtors’ credit-related activity, such as new loans, account balances, payments (including late ones), defaults, judgments, etc. The agencies maintain files on every person who uses credit of any kind.
This is a deal breaker every time. If a landlord had to forcibly remove a renter from the property, it was probably for non-payment of rent. If the eviction is for another reason, it could be for criminal activity or repeatedly disturbing the peace, offenses often worse than non-payment.
You can bet that if the prospect has a criminal past, he or she isn’t going to admit it, unless the offenses are minor. Here is where you find out whether this person is even the right owner of the information. Identity theft, posing as someone else, is a real possibility these days.
Other common reports include Employment Report, Registered Sex Offender, Terrorist, Marriage/Divorce History, Child Abuse/Abandonment, Property/Real Estate History, Property Tax Liens, Foreclosures, Fi Fa Filings and State or Federal Income Tax History.