How to pre-screen a potential tenant's credit

When showing your property to tenants, it is important that you run a very through background check on their credit history to ensure that they pay on time, and that they do not have any large outstanding debts. Chances are that if they do, you will be stuck with tenants that do not really care about paying you on time, that do not care about taking care of the property, and who will probably be more likely to scam or sue you to try and get money from you. Everytime you decide to select a tenant, take the time to run a background check on them and you can avoid 95% of all issue right up front.

Before you rent your property or even put it up for lease, make a list of questions to ask a potential tenant and bring it with you during your tenant interviews and unit showings. You can check online for numerous "tenant questionnaires" "tenant background check forms", but be sure to cover questions like: 1) Full Name - including first, middle, and last names 2) Phone numbers you can reach them at - cell phone, home phone, and business phone number. 3) The potential tenants reason for moving 4) Ask them when they are looking to move into a new 5) The number of people they live with now, and the number they intend on living with. 6) Ask them if they have children and their ages. 7) Ask them if they have any pets 8) Ask them if they smoke 9) Let them know that they will be required to fill out your credit background check and that it is standard practice. If they refuse or are hesitant, you do not want to rent to them. 10)Ask them to provide you with Landlord References, names and phone numbers. Be sure to follow up on these immediately, as they could be fake. Also, feel free to ask about any other information that you know would make the tenant undesirable to you. Serious applicants want to make a good impression on you and will be happy to answer any questions. You want to avoid applicants that refuse to answer your questions.

When selecting a tenant, you should be pre-screening them as soon as you first talk to them or meet them. Usually you will meet a potential tenant for the first time over the phone. Discuss the property you have for rent, your lease, and other details, and gauge their level of interest. If they want to come and check the place out, inform applicants of rent and security deposit requirements and other relevant information that might disqualify the prospective tenant to see how serious they really are. If they are still interested in checking out the property, then you can go over your questionnaire you prepared in Step 1 with them in person.

When you first meet the tenant in person, there are a number of factors to look for to help you pre-screen them and determine if you want to rent to them. Here are some of the most common things to look for: 1. The general appearance of a person and how they maintain themselves can hint at what kind of home they keep. In general, do they look neat and clean? How do they carry themselves? Do they look like they would care for your property? 2. Does this prospective tenant have manners and behave respectfully? Do they have indications of being difficult to deal with in the future? Did the prospect wipe his or her feet when stepping into the house? Did the prospect walk into the rental while smoking? You can learn a lot about people even before speaking to them. Sometimes it helps to pay attention to details. I often look back at my first meetings with tenants, and 9 times out of 10 - they all turned out to be the type of people that I thought they would be just based on their first impressions alone. 3. Note how the potential tenants feel about the property, and also note if they criticize your property. Are they pointing out legitimate concerns or they looking for a way to “negotiate” a lower price? Are they demanding too much, are they unrealistic, and do they seem difficult to work with? 4. Does the Prospective tenant look serious about the property and their questions posed to you. Are they prepared to fill out an application and pay the fee that is associated with it? Are they willing to provide you with the security deposit you are requesting?

Now that you have gone through steps 1-4, and probably turned away quite a few applicants, you might have one or two people left that you would be willing to rent your property to. One of the most important tools for a good tenant screening is a rental application. Make sure the application includes questions that you feel are crucial to renting to this person. It is very important that the application be filled out thoroughly and accurately. Be sure to request a copy of the person’s driver’s license and social security card to verify their identity. You need these pieces of information to run a credit report. Despite what their appearance tells us, a credit report will give you a much more accurate perspective of the applicant.

Now, go to the site that I have included in the resource link, and run a credit report on this applicant. I have used the resource provided many times, and they offer excellent services and other reports that you might find useful. The name of the company is Citi Credit Bureau.

Once you are satisfied with this potential tenant as someone that you want to rent to, set the time, date and place for your lease signing. Instruct the applicant to bring the proper amounts of money, how you would like to be paid (cash, or check) and identification.

Using a legal residential lease, read over the entire lease with the tenants at a lease signing, and have them initial each page. Since this is the final agreement it is extremely important to be sure that all parties involved agree to it. By having them initial each page, this shows that you did your due diligence and went through every item with them. If you need to make comments on items, that is also fine, just initial them. I had a court case against a tenant once, where they disputed the agreement in court - the attorneys went over the document copies we had and saw that they initialled every item, and threw the case out. As you read the terms of the lease with the tenants, look for any points of contention they may have, and discuss late charges and fees. Be sure that any specifications that you have set forth are included in this lease, or are added as an addendum to the agreement signed by all parties

Remember, it is not too late to change your mind. If you do not agree with the tenant’s response or something just does not feel right, do not rent to this tenant.