Landlords, how do you run credit checks on potential tenants?

[Amethyst]

We are getting ready to put our rental town house on the market Sadly, after 2 years our dependable tenants are leaving. It is a crummy time to have to re-rent. (When is it ever a good time?)

We have always asked prospective tenants for references, but have never run a credit check, since we don't know how to run a credit check on somebody who isn't us. I haven't found a description of the process on the Internet.

What are the steps? How much does it cost? Are there times when you haven't run a credit check, and been sorry later?

Thanks for any advice and assistance,

Amethyst

 

[tryan]

Credit .... schmedit. I haven't run a credit check in 20 years; great credit says nothing about how they'll treat the house.

Last October I rented to single mom (recently divorced and foreclosed on). She's a neat-feak. Pays the rent the day BEFORE it's due. Property has never looked so good! Rejecting her based on some "credit glitch" would have been my mistake!

Talk to a landlord 2-back ... then if you REALLY want good info: visit where they currently rent to see how they live. Then make sure they gross at least 3x the rent (ask for pay stubs).

 

[calmloki]

No credit checks here either - get burned sometimes, but that's mostly me being a mutt and buying a story rather than listening to my belly and seeing the right amount of money.

 

[simple girl]

I've never run one myself, but I know you can run one via this website: www.mrlandlord.com

We have a rental townhouse, too, but we use a property management company b/c we live 2 hours away.

We took a renter with less than stellar credit last year but required a co-signer. They were late on a few payments last fall. They did catch back up, so we didn't have to go after the co-signer. No idea how effective that actually is, but still, it gave us some peace of mind. We also required them to switch to automatic debit of their rent. No problems since last fall (knock on wood).

 

[Nords]

We have always asked prospective tenants for references, but have never run a credit check, since we don't know how to run a credit check on somebody who isn't us. I haven't found a description of the process on the Internet.
What are the steps? How much does it cost? Are there times when you haven't run a credit check, and been sorry later?

There are about 14 gazillion websites that promise to run a "tenant credit check" for $14.95. You have your tenant fill out the company's form (with SSN) and fax it or enter it on their website.

I don't know if you'll find a better deal in your local area than on the Web. Your bank or credit union could recommend a company.

But we're another set of landlords who don't bother. We go for the military renters. Haven't been sorry yet. As mentioned, the most talkative references have been the landlord before the current one-- but only one had any complaints.

I'm a big fan of EFTs. Our credit union has started putting a five-business-day hold on checks that come from out of area. (This policy has been implemented by a credit union that's among the world's largest with branches in just about every degree of latitude/longitude, so I don't understand their "out of area" attitude.) So although my checks will be cashed/cleared within 24 hours, my deposits take over a week for them to (retroactively) credit.

 

[CybrMike]

I use National Tenant Network or ntnonline.com. They have a package for $30 bucks that checks sex offender registry, criminal background, credit, prior evictions, etc.

Its a one time $35 setup fee and $30 per tenant that you run.

I just charge a $30 application fee so its a wash.

Worked great so far except in this economy it seems everyone has bad credit or is leaving a foreclosure.

 

[Arif]

I used to run a credit check on tenants but stopped awhile back after I developed my gut. One red flag is if you have a prospect that wants you to "work with them on the deposit." That gets an automatic "no deal."

 

[calmloki]

I used to run a credit check on tenants but stopped awhile back after I developed my gut. One red flag is if you have a prospect that wants you to "work with them on the deposit." That gets an automatic "no deal."

Yup - i'm a mutt - do work with people on deposits maybe 15-20% of the time. Not a real good plan, tends to load the stress meter.

 

[Arif]

Yup - i'm a mutt - do work with people on deposits maybe 15-20% of the time. Not a real good plan, tends to load the stress meter.

I'm allergic to stress!

No deposit no rental for you! Come back when you have deposit!
Signed,
Landlord Nazi

 

[tryan]

Wow you guys are tough on the deposits ... Always said if you had 2 months rent saved you could buy a house (more so in the past).

I get about 1/2 my security deposits over the course of the first 6 months. Now you won't get the keys until I have the signed lease, first month and part of the deposit.

 

[clifp]

I find pipl.com to be a pretty good alternative to a $15 internet searches. It is specialize search engine that focus on people. The one thing it does well is search public records. It found my speeding tickets and mortgages, and as well as report on any bankruptcy for perspective tenants.