Economic conditions have taken a toll on many prospective residents and
increased the risk of default on lease obligations. The natural tension
landlords experience between leasing and background
screening is heightened by those
same economic conditions.
Finding the proper balance between occupancy (leasing) and vetting prospective
residents is critical under these conditions. This is especially true for
private landlords who tend to be more vulnerable to damage caused by problem
tenants and who may lack access to quality screening
reports.
Knowledge is key to successfully navigating these waters.
Tenant screening
products empower landlords to qualify more (not fewer) applicants by providing
the information necessary to accurately assess risk and establish terms.
Comprehensive tenant screening reports include:
* Credit Reports:
The devil is in the detail. Landlords cannot afford to either approve or
decline based on score alone. Derogatory credit may or may not signal increased
risk. A large percentage of bankruptcies, for example, are associated with medical
debt. Those same individuals are often excellent rental risks. Rental collections or eviction judgments, on the other hand,
are clearly red flags. The detail also reveals positive or negative trends.
* Eviction Records
Search: The majority of unlawful detainer (eviction) filings are dropped prior
to judgment (for economic reasons). So relying on the judgment section of the
credit report alone is simply not adequate. A thorough search of all names
(including AKA's) and jurisdictions is a critical component of quality tenant screening reports. A failure to search AKA's and additional jurisdictions
as part of the background screening process will result in under-reporting by as much as 50%.
*
Criminal Records Search: Criminal background checks
should examine all names and jurisdictions, and
include court records, department of corrections and sex offender
registry data.
* Records Matching:
Common names represent a significant challenge when it comes to criminal and
eviction searches. Evictions records are especially challenging since they
include relatively few identifiers. Name match alone is simply not enough. Your
tenant
screening company should do the leg-work necessary to positively match
criminal and eviction records returned to the applicant.
* Rental References:
Rental references are a critical component of the tenant screening process.
Rent payment history is a big deal and is not generally reflected in the credit
report. Eviction actions (more importantly the reasons for those actions) which
have not yet reached the courts will likely surface during reference calls. The
key is to develop a specific list of questions which do not violate fair housing
law and seek only objective responses. Whether you make the calls yourself or
outsource them to your tenant screening company, reference calls are crucial to
the landlord screening process.
Traditionally, landlords (end-users as described by the Fair Credit
Reporting Act - FCRA) undergo an extensive certification process prior to being
authorized to order and receive tenant screening reports. The cost and
inconvenience associated with the certification process makes it difficult for
private landlords to gain access to quality screening reports.
Applicant initiated screening
products (also known as direct-to-consumer
screening reports) solve this problem by putting the
applicant in control of their own information. The applicant orders a
background check on
themselves and then shares the report with the landlord or landlords of their
choice. This model has several additional benefits. First of all, the applicant
is able to
dispute information they believe is being reported in error prior to any impact
on their search for housing. Secondly, the transparency inherent in this
process demands that the consumer reporting agency "...follow reasonable
procedures to assure maximum possible accuracy..." of the information.
Further, applicants can review their screening report with prospective
landlords to determine whether they qualify prior to paying an application fee
or holding deposit - saving time and money for all concerned.
Visit
MyScreeningReport.com®
(a service of Moco Inc) for more information about direct-to-consumer
tenant screening products.