Using Tenant Screening Background Check Reports: Here’s What Landlords Should Know - Techocious- The Tech Blog

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Thursday, 8 February 2018

Using Tenant Screening Background Check Reports: Here’s What Landlords Should Know

Are you looking at housing applicants or going to renew a current tenant’s lease?  If so, chances are you are planning to run a tenant background check with the help of a company that compiles background information. If this is the case, this article is worth a read.

A tenant background check report includes a wealth of information such as the person’s credit characteristics, rental history, criminal history, and eviction and credit records.

Whether you are an owner of a property or broker agent or manager, using consumer reports to make tenant decisions is the right way to go. However, you should comply with FCRA (Fair Credit Reporting Act).  

Here’s a sea of information about the tenant background check that every landlord or manager or anyone in this profession must be aware of.

Before Getting a Consumer Report

You can get a consumer report only with a genuine purpose. As a landlord, you can acquire consumer reports on tenants and applicants who apply to rent housing or renew a lease. To get the report from a background check company, you should certify to the providers that you will use the report only for housing purposes.

How to Comply With the FCRA

To comply with the FCRA, you need to take action based on the consumer reports. Once you are done with conducting the tenant screening background check and you have collected a consumer report, go ahead according to the reports.  

Here’s what is included in the report.                                    

  • Applicant’s rental history based on reports from housing court records or previous landlords
  • Description of the applicant’s rental history
  • Credit report service from a credit bureau;
  • List of previous landlords or other parties on behalf of the rental property owner
  • A report from a background-check company about an applicant or tenant’s criminal history.                

Adverse Action

A landlord enjoys the right to take an adverse action. This right is unfavorable to the interests of a tenant or rental applicant.  Example of some of the common adverse actions taken by landlords includes:

  • Rejecting the application
  • Raising the rent to a higher amount to a particular applicant
  • Requiring a deposit from a specific applicant
  • Requiring a co-signer on the lease
  • Requiring a larger deposit. It may not be applicable for other applicants.

 You can take the adverse action in case you are turning the applicant down for the rental, or have found something on the screening.

Post the Adverse Action

If you increase the rent, deposit, or refuse an applicant, or require a co-signer or take adverse action based on the consumer report, you should give a notice to the tenant about the fact – orally, in writing, or electronically.

By sending a notice, you keep things fair to the applicant. With it, you let them enjoy their rights to see the information being reported about them and to rectify if anything is wrong.

While you should check local and federal laws to stay up-to-date about the current laws, we have given here a few things that you should include in the adverse action notice.

  • Name, address, and contact number of the tenant background check company that supplied the report;
  • A statement that the company that supplied the report did not make the decision to take the unfavorable action
  • Name of the applicant/tenant, landlord/property manager of the property that was being applied for
  • Information about why the applicant is receiving the Adverse Action Notice

As the property owner, you can also send an Adverse Action Notice even if the information in the report of tenant screening background check wasn’t the key reason for your decision.

Final Thoughts

The tenant background check is a must for landlords. You should never ignore it. It’s safe for you and for the tenants who have already rented your property. Find a reputed company that provides background check service and collect the consumer reports. Got any ideas about tenant background screening? Write in the comment box. 

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