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How to Run a Credit Check on a Prospective Tenant

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What Information Is in a Credit Check?
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Why Is a Tenant Credit Check Important?

As a property owner, checking a prospective tenant's credit is a vital part of protecting your investment. Since you can’t always judge a book by its cover, this check allows you to delve deeper into the financial condition and habits of the prospective tenant. If they have a good credit history and pay their bills on time, chances are they will pay their rent on time as well. Keep in mind that credit checks are not foolproof.

What Is in a Credit Check?

The information in a credit check will vary based on the agency you use and how in depth of a report you pay for, but can include:

  • Identifying information: Confirmation of name, current and past addresses, date of birth, known employers, name of spouse, and Social Security number.
  • Credit History: Lists bank accounts, credit card accounts and any loans (mortgage, student, etc.) It also lists how long the account has been open, the payment pattern over the last two years, the loan amount or credit card limit, and if there are any co-signers.
  • Public Records: Will list any evictions reported, bankruptcies, tax liens or (civil) judgments against the prospective tenant.
  • Inquiries: Will show the names of those who have requested a credit report on them for the last year.

Some reports will also include the prospective tenant’s FICO score.

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