Checking Prospective Tenant’s Credit Standing
Majority of the
landlords have experienced having to deal with tenants not paying their rent.
Additionally, having to evict tenants with tedious and costly eviction
proceedings are something landlords wouldn’t want to go through. As a landlord,
doing a credit check on the
potential tenant before giving him the approval for your rental property is
essential. Checking the potential tenant’s credit history will give you a
glimpse of his financial standing. Furthermore, will alert you of potential
problems which may arise and can also reduce the possibility of you accepting
troublesome tenants.
There are
various agencies that provide credit checking services over the internet. Some
of these agencies charges per report, others require membership fees. This can
be quite expensive especially if you have large number of potential tenants,
that is why, some landlords require that the cost of credit check be shouldered in part by the applicant. However,
credit checking entails some sort of methodological process to ascertain that
the data collected are relevant.
Before
proceeding to the credit check, the
prospective tenant’s consent must first be obtained by having him sign the
required documents. The documentation requirements may vary depending on the
area. So, it would be helpful to research on the tenancy laws applicable to
determine which documents are required. It is also very critical to get hold of
a credit report for the right person, hence, it is best to check the documents
thoroughly to make sure that all the details are accurate and correctly
spelled.
There are
various online credit checking agencies that you can choose from. Some of these
agencies charges per report, others require membership fees. This can be quite
expensive especially if you have large number of potential tenants, that is
why, some landlords require that the cost of credit check be shouldered by the
applicant.
The ideal credit
report should contain the potential client’s debt history for at least the last
five years. Take into consideration how much debt the applicant currently has,
and if all debts are timely paid. A potential tenant who has a significant
difficulty paying-off past debts or those who have fallen behind his present
debts, should be avoided. In some instances, the credit report will reveal little
or no data. This could mean that the applicant may be new to the country or he
may have other identities that have not yet been tracked, so extra caution
should still be exercised.
