Most of a screening report is straightforward information that is easy to digest. However, some of the terms used in a tenant screening report could be confusing if you have never heard them used before. Below is a quick terminology guide that you can use as a point of reference for your tenant screening report.
The first part of the tenant screening report, as pictured above, is the snapshot. This is a quick overview of the applicant and gives you valuable information, such as their credit score, the number of criminal records found, evictions on record, employers on file, accounts in collection, and public records. This section will be very valuable for landlords who are seeking applicants with a specific credit score. Depending on how high or low the credit score is, the numbers will show up in red, orange, yellow, or green. At the top of the snapshot, you will see a credit recommendation. This is information we receive directly from the credit reporter, it is not our own recommendation. It is also important to note the credit recommendation is based solely upon the applicant’s credit score. It does not take into account any criminal records, evictions, or other information from the report. This recommendation is based upon the following bar graph.
Another important thing to note about this section of the tenant screening report is that the number of employers reported may not be 100 percent accurate, due to the lag in employment reporting to credit agencies. As a landlord, you need to verify current employment and check references on your own. The applicant also reports their own income, which means you need to independently verify their income to ensure accuracy. The credit report will not pull their actual income. Be sure you follow up with employment references and verify their income on your own. Be aware, if you decide to deny an applicant based on information in their credit report you’ll need to follow the Fair Credit Reporting Act rules as it relates to notifying them.
Description Section: Score Factors & Criminal Records
The next section will give you detailed information about any criminal records found during the background check. If the applicant does not have a criminal background, this area will read “no available data.”
In this section, you will find the case number as well as the court information for each record. You can use this information to contact the court to learn more about the criminal records or, when applicable, you can look up the description number to find out what charges are on the applicant’s record.
Profile Summary: Tradelines, Collections, & Public Records
This next section may seem confusing at first glance. However, if you use the terminology guide from above you can break down the information quickly. The tradelines are simply accounts that the applicant has open, such as car loans, credit cards or mortgages. The collections number reflects how many accounts they currently have in collections. The public records number includes items like tax liens and civil judgments (with further details provided later in the report). Negative tradelines are accounts for which payments have been missed. The historical numbers reflect how often the applicant’s accounts have had missed payments.
The section under this provides details about each type of account, whether it is something with an installment payment plan, revolving (such as credit cards), or a mortgage. This section also informs you of how much is owed and how much is past due. You can also see the total balance owed on all accounts, the total past due amount owed, and the credit limit the applicant has left. In this case, this report shows a credit limit of $475, which is extremely low. The total past due here is $10,067, which would alert you that this applicant is in financial trouble.
Accounts, Balances & Past Dues
The next section of the report will provide you with more details about the tradelines, or accounts, mentioned above. This area will often include information about what company is holding the account, what type of loan it is, and what amounts are still due on each account. It also provides valuable information on how much the applicant is past due on each account and what the payment amount is supposed to be. This can help you gain a better understanding of what bills your applicant will have outside of your rental cost. This is why income verification is very important. Someone may have multiple tradelines with large monthly payments, but if they have the income to back this up, it isn’t necessarily a bad thing. However, if they have multiple accounts that are past due, you might have a concern about their ability to pay rent on time.
Calendar Of Payments
The next section of the screening report will show you a calendar of payments. This will let you know with green check marks when payments were made on time and with yellow, orange, and red circles the number of days a payment has been late. This section will help you see how often the applicant misses payments or makes payments on time.
The next section will provide information for applicants who have had accounts sent to collections. If they do not have anything in collections, there will not be information here. However, in this example above, you can see how many accounts are in collections, the details of what is owed, and the credit grantor name.
The next section will show you what public records are on file for the applicant. These include tax liens and civil judgments. This section will also give you details about the records and the dates they were reported.
The last section, which is included for landlords who opt to request Eviction Reports along with the credit report and background check, will provide detailed information about any evictions on record. This is extremely valuable information for landlords, as a history of evictions can provide a major red flag for applicants.
Screen Your Tenants Thoroughly
As a landlord, your goal is to find a responsible tenant who pays on time and treats your property with respect. Our goal at TurboTenant is to help you do that through detailed tenant screening reports. While, ultimately, the decision will be up to you as to who you accept and decline, you can use tenant screening to effectively learn important details about the background of an applicant. Remember, always abide by Fair Housing regulations and ensure you use standard criteria for all applicants when determining who you will accept or reject. Also, be aware, if you deny an applicant based on information in their credit report you’ll need to follow the Fair Credit Reporting Act rules as it relates to notifying the applicant. If you are uncertain about how to best handle the rejection and acceptance portion of screening, consult with a local attorney for advice.
DISCLAIMER: TurboTenant, LLC does not provide legal advice. This material has been prepared for informational purposes only. All users are advised to check all applicable local, state and federal laws and consult legal counsel should questions arise. Updated 1/15/2019