Tenant Screening Reports are one of the most important things Landlords do. Effective Tenant Screening not only ensures that you only hand over possession of your property to qualified Tenants, but it also substantially reduces the risk of bad rental outcomes like missed rent payments, property damage, and evictions.
The key to good Tenant Screening is effectively collecting and analyzing the necessary information about Applicants. Of course, the first step is a good Tenant Screening Service that ensures you get all of the information you need, including a credit report, criminal history report, eviction report, and Tenant Score.Using a Tenant Screening Checklist is an easy way to make sure you collect all the data you need.
But the second step – analyzing the information and paying attention to any red flags – is also an important part of Tenant Screening. With that in mind, here are 4 things you should pay attention to in Tenant Screening Reports.
1. Evidence of Late Payments
When screening Applicants, an important question for Landlords is: will the Applicant consistently pay rent on time? One of the best ways to answer this question is by looking at an Applicant’s past behavior.
While screening questions and questionnaires for prior Landlords should ask about timely rent payments, you need more information about past payment behaviors. A credit report and either a credit score or, better yet, an ezTenantScore are the best ways to determine the likelihood that an Applicant will consistently pay rent on time.
Here’s why this information is so important:
- A thorough credit report shows patterns of making payments and managing debt. Most go back 7-10 years and provide evidence of whether an Applicant is on time with payments.
- A credit score uses information from the credit report to evaluate an individual’s likelihood of repaying a loan.
- An ezTenantScore is similar to a credit score, but it’s more narrowly tailored to specifically evaluate the risk of an Applicant not paying rent on time.
Besides just asking Applicants and prior Landlords about timely rent payments, Landlords should evaluate credit reports and an ezTenantScore to look for any evidence that the Applicant has been late with payments or presents a heightened risk of not paying rent on time.
2. A History of Evictions
If an Applicant has a history of evictions, this is something you want to know about. Although some states prohibit using eviction history as a reason to reject an Applicant, many Landlords use an eviction history as an important factor in their Tenant Screening.
While you can ask Applicants and their prior Landlords about any evictions, the best practice is getting an eviction history report. This will show any evictions in at least the past 7 years, including times when an eviction was filed but the Applicant never ended up in court.
A history of evictions is a major red flag. While some Landlords won’t rent to Applicants with a history of evictions, there are some circumstances where you might decide, based on additional context, to rent to the Applicant. Either way, it’s important to gather all of this information to make an informed decision.
3. Evidence of Instability
When screening Applicants, you’re looking for a reliable Tenant that will stay through the entire Lease period, pay rent on time, and take care of your property. You want to look for Applicants with evidence of stability and avoid Applicants with evidence of instability.
Some issues that could indicate instability include regularly changing jobs, moving frequently, having unexplained gaps in employment, or having poorly managed finances.
To help identify evidence of instability, it’s important to review an Applicant’s credit report,verify an Applicant’s employment and income, talk with two prior Landlords, and review employment and housing history. Sometimes evidence of instability isn’t as glaring of a red flag as other issues, but it’s something that Landlords should pay attention to and consider in their screening process.
4. Missing or Inaccurate Information
Finally, when reviewing an Application and Tenant Screening report, it’s important to pay attention to any missing or inaccurate information. While it might just be an oversight by the Applicant, it could also be evidence of a bigger issue. Whenever information is missing or inaccurate, it’s important to follow up with the Applicant and your screening provider to make sure you run all necessary reports with accurate information.
And, if you determine that an Applicant intentionally withheld information, that would be a major red flag and grounds for rejecting the Application.
5. Criminal History Report
When evaluating Applicants, it’s important to know of any past criminal convictions an Applicant has had. While these might not be grounds for rejecting an Applicant – and in fact, in some circumstances and locations it’s illegal to do so – it’s still information that you want to have.
The reality is that there are some criminal history reports that might indicate that an Applicant poses a safety risk to other Tenants, neighbors, or the property. This is information that you need to have!
To make sure that your process is consistent and fair, it’s a good idea to have objective guidelines that you use when evaluating all Applicants’ criminal history reports. When creating these guidelines, remember to only consider convictions, not arrests, and to make sure that your guidelines comply with all state and local laws.
Tenant Screening Reports Matter
At ezLandlordForms, we understand how important Tenant Screening is and offer a way for Landlords to get all the information they need in one place. Plus, between our ezTenantScore and our user-friendly system that automatically highlights red flags, we make it as easy as possible for Landlords to pay attention to the most important things in the screening reports. Use our Screening Tools today to see just how easy this process can be.