Top 5 Things You Should Know When Choosing a Tenant Screening Company
by Joe Killinger
1. Know the Reports You Need
Deciding which reports you need prior to starting your search for a good tenant screening company can save you a lot of time, know what you want and don’t take just what they offer. Be sure the companies you consider offer a per transaction pricing and no minimum monthly service fee (yearly inspection fee not included) as you may have months that you will not need the service and may therefore be wasting money. Top 6 reports to look at – Credit Report, Evictions, Liens and Judgements Report, Social Security Number Validation, Identification Verification, National Criminal Records Search, and Sex Offender Registry Search.
Don’t just choose a company that only offers public record searches, instead make sure that they are authorized direct resellers for the Credit Reports, otherwise you may just be paying a middleman extra money.
2. Tenant Involvement in the Screening Process
There are screening companies that will allow the tenant to fill out the information and then send the landlord a pin number to login to view their reports, an issue you may run into with this type of system is that the tenants will fill out as little information as possible so it makes the reports less effective. The information may be either incomplete, or on wrong individuals. The more information the system can collect, the better the information you will receive.
3. Incomplete or Wrong Information
When you receive your potential new resident’s report you need to read it carefully, here’s some guidance on how to read a credit report if you feel you need it. The information can be incorrect for many reasons (e.g.: common names, misspelled information or identity theft), once you have the report you need to read it thoroughly and if you have questions you should ask the potential resident about each item. Here are some tips to look for in a tenant screening report.
4. Manual Reports Compared to Instant Services
These days the preference tends to lean toward the instant services as we are moving fast in property management and no one wants to wait the extra time that it takes to manually compile a report. However, manual reports have usually been the ones that give you the best data to make your decisions. This does really depend on the company though, so be sure to see how long the company has been in business. By using a company that is a direct reseller for the credit agencies, you should be able to get a return much sooner.
5. Credit Reports Compared to a Credit Check
A full credit report includes a report from one of the three credit agencies (Equifax, TransUnion, or Experian), and typically a FICO score along with any other reports that you decide you want included from your provider. These reports usually give you the most detailed information. Some of the larger property management companies also prefer to have a FICO score as they feel it is a good representation of the current status of their potential new resident while others don’t even bother with it. If you have a screening company, do a credit check – it may only offer non-credit agency related information like evictions history and criminal history records.
There are also companies advertising themselves as a tenant screening company and they do nothing more than pull free public data that you could have found on your own, so be sure to ask your potential provider where they get their reports from.
With these 5 items, you should have enough information that would allow you to find a reputable provider for your tenant screening services. If you have any further questions, please feel free to reach out to [email protected].