Tenant Background Screening FAQ

Property owners must make informed decisions when managing their real estate. Choosing the best tenant is especially important considering the problems a bad tenant can cause. This article answers some common tenant screening questions.

How Can I Legally and Effectively Screen Tenants?

Consider using a tenant credit check or background search to choose the best tenant for your rental property.

Tenant background screening is tricky. Your best bet is to have a prospective tenant fill out a written rental or tenant application. The rental application should include at least the following renter information:

• Legal name and aliases
• Social Security Number (SSN)
• Driver's license number
• Recent employment history
• Current income and income verification
• Previous landlords
• Past evictions
• Past bankruptcies
• Felony convictions

You should contact past landlords and references to see if the tenant has had problems in the past. Also, verify the financial information provided by the tenant. Run a credit report to review FICO or credit scores. A tenant background check can also check criminal records, such as whether the tenant is on the sex offender registry.

Tenant screening services will provide comprehensive tenant history reports including the following:

• Eviction history
• Eviction records
• Rental history
• Payment history
• Criminal history
• Address history

How Do I Run a Credit Report, and Can I Reject a Tenant Based on the Report?

An essential tool in tenant background screening is the credit report. You can get a credit report from one of the major credit bureaus. To begin a credit check, you need the following information from your potential tenant:

• Name
• Address
• SSN or Individual Taxpayer Identification Number (ITIN) from the IRS

The three largest credit bureaus are:

• Equifax
• Experian
• TransUnion

You can find information about running credit reports on the bureaus' websites.

Do I Have To Use a Written Rental Application?

No. But it's risky to rely on an oral agreement. So, it's advisable to use a written rental application.

Using written applications can help you justify turning down an applicant. For instance, you can use other applications to explain why you chose another applicant.

Courts are not in the business of being landlords. A judge is unlikely to fault you if you have a reasonable, non-discriminatory reason for choosing a tenant. But, if you have no documentation to support your decision, disputes with rental applicants can become a "he said, she said" situation. Courts tend to favor tenants when the landlord doesn't have any records.

What Are Some Illegal Reasons To Reject a Tenant?

Federal and state fair housing laws regulate the tenant background screening process. They prohibit you from refusing to rent to a tenant based on the following factors:

• Race
• Gender
• Sexual orientation
• Religion
• Disability
• Ethnicity
• Having children

Some states also prohibit you from renting to a tenant for the following:

• Age
• Marital status
• Other unique characteristics

The Federal Fair Housing Act also prevents landlords from:

• Ending a tenancy for a discriminatory reason
• Setting different terms for tenants, such as having different income requirements
• Refusing to provide a reasonable accommodation for disabled people
• Advertising a preference for certain groups, such as groups based on race or gender
• Claiming that an available rental unit is unavailable to certain applicants

What Are Some Valid Reasons To Reject a Tenant?

Valid reasons to reject a tenant include the following:

• Poor credit history
• Unpaid liens
• Positive criminal background check results
• Insufficient income
• Prior misconduct

You must select a tenant based on reasonable, business-related reasons. Even so, property managers and landlords can disagree about the best-qualified tenant. So, don't fear losing in court for selecting one similarly qualified tenant over another.

Remember to apply the same standards to all applicants. And keep documentation to support your decision. For example:

• Tenant applications
• Tenant screening reports
• Eviction reports

If you are uncertain about screening standards, speak with a landlord-tenant attorney.