Landlords should always try their best to evaluate each potential tenant prior to entering into a contract. One of the best ways to evaluate an individual’s worthiness as a tenant is to examine their credit and other personal information that is available through public request. A consumer report is the best example of this and can be used to figure out a number of characteristics about any given person. The following information contained in these consumer reports can help you weed out potential troublemakers.
Evaluating Credit Scores
As mentioned prior, credit scores can shed a lot of light on how reliable a potential tenant will be. Available from all three major credit bureaus, these reports provide insight into how responsible an individual has been with their finances and will help you determine whether or not they are a good fit for you. While not all tenants will have credit scores, it is still a good place to start in the vast majority of cases.
What They Entail
Listed in consumer credit reports is the credit score of the individual, which is a broad-based indicator of how much credit the individual has and how responsible he or she has been with it. While some people – particularly younger people – have lower credit scores, this is not necessarily an indicator of malicious or financially negligent activity. Those who have been irresponsible will have marks on their credit showing any outstanding or neglected balances.
How To Proceed
Whenever you intend to decline a tenant based on information gathered in a consumer report, the process is known as an adverse action. In order to be in compliance with local, state and federal laws, you must submit the information of the consumer agency, a statement regarding the specific situation as to why the individual was turned down and their option to appeal the decision to the consumer agency. Adverse actions include denying the application outright, requiring a co-signer, requiring a larger than normal deposit or a deposit if not required under normal circumstances and an increase in the monthly rent.