There was a time when landlords would meet a tenant face to face, decide on the spot whether they trusted them, and hand over the keys. Times have changed. Today, with so many more people, and so much more mobility both nationally and internationally, renting property to any tenant is a much riskier proposition.
Credit checks for tenants are a good start, but they don’t always paint a complete picture. Here is why you may want to go a little deeper, and what you might also learn from credit and other checks for tenants.
No, It’s Not All About Money
One of the primary concerns for landlords is whether or not their prospective tenant can and will pay their rent on time and regular as clockwork. That is not, however, the only factor in a successful tenant / landlord relationship, and there are many other things that might go wrong that have nothing to do with money:
- – Tenants may damage your property.
- – Tenants may conduct illegal activities from your property.
- – Tenants may invite more people than you would like to share the property with them.
- – Even tenants with perfect records so far could lose their job and default.
There are many other risks that face landlords when choosing their tenants, and they all need to be carefully weighed before making a decision.
Detailed Checks Can Reveal a Lot
While it’s true that a credit check can’t tell you everything about a tenant, it can tell you more than you might expect, if you know what you are looking at.
Unexplained income is a big red flag. A prospective tenant who does not list their employment, or appears to have more money than they should for the job they have could well be involved in something less than honest.
Financial court judgements might also be a warning sign. In some cases, those judgements may be related to unpaid bills or damage to property. If you find any sort of judgement, it’s always best to investigate the cause.
A completely absent credit report is another big red flag. Most people have at least some credit history of some kind, and if you can’t find anything at all, that’s a sign that they might not be being entirely honest about their identity.
Interpretation is Crucial
One of the reasons we recommend having all your background checks (including credit checks for tenants) carried out by professionals is because interpretation of reports is so important. When a professional looks at these sorts of reports, they look for what’s not said as well as what is. They know when to dig a little deeper, and where to look.
Professionals will have quick and easy access to resources that you might not even be aware are available. This is particularly true when you are looking into international or out of state tenants.
If you are considering renting, and you do plan to conduct credit checks, remember that there’s more information there than you thought, and consider using a professional if you’re not sure what to look for. The cost of the service could save you many times the money in damage or losses down the road.