FAQ: What You Should Know About Tenant Screening

When your rental property is newly available, it can be tempting to try and get a new tenant on the next lease as fast as possible.

But we’re here to tell you that tenant turnover and problematic renters could end up costing landlords a lot more than waiting for the right tenant would. The next time your space is available and you’re on the hunt for a new lease to sign, take a moment to screen your potential renters before signing onto a legally-binding rental agreement. We’re answering landlord’s top questions about tenant screening to help you secure high-quality tenants every time you list your property for rent.

FAQ: What You Should Know About Tenant Screening
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What appears on a background check?

If you’re serious about finding a reliable renter to take over your next lease, you will absolutely want to look into including a background check in your application process. Every background check is different— some include a rental history report while others just check for a criminal background. When it comes to properly screening your tenant, the more robust the check, the better.

Here’s what you should look for when choosing a service to run background checks:

  • Credit score
  • Criminal background
  • Rental history and eviction data
  • Income information
  • Compliant background check service

What else should I ask prospective tenants?

While background checks give you a lot of helpful information about your potential renter, they don’t answer every question. In order to avoid problem tenants, make sure your rental application is thorough and legal so you can get the information you need without violating any tenant’s rights. You can feel free to ask for personal or rental references to get more insight on the applicant’s rental history or professional life.

What should my minimum credit score be?

What should my minimum credit score be?

This is a tricky one. Choosing your minimum credit score mostly depends on your city. Check out the average approved credit scores for your region— but ultimately go with what you’re most comfortable with.

Take some time to understand how credit scores are calculating (before deciding how to use it when screening tenants or ruling out tenants). According to leading credit company Experian, major considerations impacting credit scores are:

  • Payment History: Late or missed payments.
  • Credit Utilization Rate: The amount of credit you currently have used to the total amount of credit available to you. The lower the credit utilization rate the better.
  • Number of Accounts: The total number of accounts and the balance of each account.
  • History of Credit Use: How you have used credit in the past. Long term positive credit history will have a good impact on credit score.
  • Credit Mix: The mixture of retail credit cards verses other forms of credit (home equity lines of credit, installment loans).
  • Hard Inquiries: Requesting your credit score repeatedly can have a negative impact on credit score.
  • Negative Information: Negative information including collection accounts, bankruptcies, charge-offs, and settled accounts have an adverse impact on prospective tenants credit score.

Are there any legal issues I should know about?

If you want to run a background check on your prospective tenant(s), you will need to take note of the legal regulations involved. Before you initiate a background check, you will need to get proper authorization from the applicant and use a tenant screening service that is compliant with FCRA regulations.

Kasia Manolas’ guide “15 Legal Reasons to Deny a Tenant” discussing legal options for screening tenants (of course, every state, city, and county may be different – so check with a reliable landlord-tenant attorney in your area). Here’s Kaisa’s explanation as the legal reasons for an eviction: does not make enough income, smoking, pets, income that cannot be verified, history of arrests or crime conviction, no rental history, history of damaging property or not paying rent, disclosing false information, low credit scores, refusing credit score and background check, bankruptcy history, negative employer review, prior eviction, and declines proposed rental terms.

What if I need to evict a tenant?

What if I need to evict a tenant?

If you do end up with a bad tenant and need to start the eviction process, make sure you follow the proper processes. Understand the eviction laws in your state, get legal help, and follow the rules. No landlord wants to go through the eviction process— screening your tenants properly is just one way you can avoid this sticky situation altogether.

Unfortunately, eviction may prove to be inevitable in some cases. If you end up needing to evict a tenant at some point, also check out Landlordology’s handy step-by step guide.

Do I need to screen short term tenants?

It depends! If you’re renting your space on a website like Pillow, guests will automatically be background checked, making it convenient for landlords to keep spaces occupied in between tenant vacancies. If you’re renting to a short-term tenant without the help of an app, you may want to run a background check on these renters. Even if a renter is only staying a month, it’s safer to go through an application process and protect yourself and your property with a month-to-month lease.

How do I find good tenants?

Finding good tenants starts from the moment your former tenant vacates the property. From cleaning the space professionally to listing and managing your property, you want to make sure you’re running everything professionally! Use an app like Landlord Studio to process payments, communicate with tenants easily, and view lease details so that you’re never out of the loop.

Besides being professional about your entire operation, it’s important to note that bad tenants are practically lurking around every corner. So, to avoid those bad eggs, properly screen your tenants, run comprehensive walkthroughs, and use your best judgment to find the right tenant to rent your property for the long term!

In conclusion

Screening potential tenants is a great way for landlords and property managers to avoid complicated rental situations with problematic tenants. If you are going to run a background check on your future tenants, just be sure to refer back to these FAQs to make sure you’re following the right guidelines!

We know, properly screening tenants is A LOT of work! Thinking about just selling the property instead? We at 365 Property Buyers would love to talk to you about buying it! See what other property owners have said about working with us and fill out this simple form to get a cash offer for your rental property or you can give us a call today at (501)369-0365

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