How Do I Run a Credit Check?

How Do I Run a Credit Check?

Finding a credit rating on a potential tenant is a common practice in California. A credit report can reveal past failures of an individual to honor financial contracts. Taking into consideration the work it takes to rent a property, it only makes sense to confirm the financial obligation of the person promising to cover rent. Finding a credit report generally requires only a small fee, financial information and permission from the prospective tenant.

Collect information from the potential tenant. To get a report, you will need your renter’s name, Social Security number, address and date of birth. You may also want to ask for bank and employment information, both to observe your tenant has a source of revenue and to confirm he has funds available for payment. You can either make your own form or use a common landlord template.

Get permission. You can only acquire the credit report of the other individual if you have written permission.

Confirm provided yourself to information. Before you pay a commission to any service, confirm the financial and employment information you are given is accurate. If your prospective tenant lied on her application, there is no need to perform the excess work of obtaining an actual report.

Purchase a service. Reputable providers like Experian, Tenant Verification Service and AAA Credit Reporting Services can get your credit report for you. Depending on the amount of the fee you pay, a seller may give you extra details like a credit score or other history information on your prospective tenant.

Summarize the data with your tenant. Credit reports often contain mistakes, so if a report comes back with adverse marks, you may choose to ask your tenant to describe. Other instances, honest debtors fall into unfortunate situations through little fault of their own, like when a partner or former spouse runs up debt in someone else’s name. Should you otherwise trust and like your prospective tenant, allow him the opportunity to explain.

Report any decisions that are negative. Should you refuse to rent to a person based on data you get in a credit report, you have to send a letter to that individual describing your reasons. You also have to include a reference to this national law which grants someone denied credit 60 days to get a free credit report.

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