Tenant Background Check Texas

What Background Checks Cover

When running a tenant background check, Texas landlords can expect to find several key data points to help them make an informed decision about renting. When using property management software like TurboTenant to run a background check, you’ll typically see information about the following:

Criminal History

While some states limit the types of data a tenant background check can include, Texas allows landlords to review:

• Active warrants for the applicant
• Court records
• Sex offender registry
• Arrest records (if they resulted in a conviction)
• Felony and misdemeanor convictions

Credit History

Checking a tenant’s credit is an integral part of the background report. However, the Fair Credit Reporting Act regulates how landlords can use this information, so they must handle it in compliance with the law.

Credit checks will typically include:

• Credit score
• Open lines of credit
• Recent credit inquiries
• Debt in collections

While understanding the entirety of a credit report is essential, an applicant’s debt in collections can sometimes signal that they might miss rent payments in the future. There’s no crystal ball, but it’s helpful information to know before accepting a candidate.

Eviction History

TurboTenant checks over 27 million eviction records covering all 50 states and Washington, D.C., as part of tenant screenings. Reports include:

• Failure to pay rent
• Judgments for Rent, Possession, and Money
• Unlawful Detainers
• Writs and Warrants of Eviction

Rental History

The rental history section of a tenant background check lists the applicant’s previous addresses and landlords.

Income Verification/Fraud Detection

Verifying a tenant’s income is essential to ensure they can afford the rental over the lease term while verifying their submitted documents are legitimate. TurboTenant offers income verification and fraud detection via Snappt as a Premium feature to ensure your vacant rental is filled with financially responsible and trustworthy tenants.

References: Landlords sometimes ask applicants for references, which can come from past landlords, employers, or personal contacts.

Federal Tenant Background Check Laws

Because a tenant background check involves sensitive information, Texas landlords should understand that they must follow federal laws when handling and considering the results.

Fair Credit Reporting Act: The FCRA requires landlords to obtain consent from the applicant before running a background or credit check. If you deny a tenant based on the credit check results, the FCRA also requires you to issue an adverse action notice, which explains the reason for the denial and includes the name and contact information of the reporting agency.

Fair Housing Act: The FHA prohibits housing discrimination based on race, color, religion, sex, national origin, or familial status. Landlords cannot screen applicants differently based on these characteristics and cannot deny housing to anyone based on their membership in a protected class.

HUD Guidelines: HUD guidelines discourage landlords from imposing blanket bans on criminal records and urge them to consider only convictions, if at all. Landlords must reasonably evaluate the nature, severity, and timing of any offenses when making a housing decision.

Texas Laws

In addition to federal laws, Texas courts have passed legislation that allows landlords to conduct tenant background checks.

Criminal history: Texas does not limit how far back a landlord can review an applicant’s criminal history, but landlords should still take HUD guidance into account.

Fair Chance Housing: Texas has no Fair Chance requirement, so landlords have broad discretion to deny housing to prospective tenants based on their criminal history.

State-specific Fair Housing additions: Texas law mirrors the federal Fair Housing Act and, unlike many other states, does not include additional protections related to sexual orientation or source of income when reviewing rental applications.

State-level notices/disclosure requirements: Texas landlords must provide applicants with a selection criteria notice outlining the minimum requirements for credit, criminal history, and income before collecting an application fee.

Reusable tenant screening reports: Laws around tenant screening reports continue to evolve, so landlords should review federal, state, and local regulations before accepting a reusable tenant screening report.

Red Flags to Watch Out For

Once a Texas landlord has run a tenant background check, they may start to notice patterns in applicants who might not be a good fit. The following red flags aren’t always signs of a bad tenant, but they’re worth considering.

Late payments or collections: Late payments or debt in collections may suggest cash flow issues or difficulty paying bills on time. This pattern could point to a tendency to pay rent late.

History of evictions: Landlords should consider past evictions. A history of being forced to leave a property may suggest payment issues or lease violations that could occur in your rental.

Unverifiable income: When running a tenant background check, if a Texas landlord cannot verify an applicant’s income, it may suggest that the applicant is not being entirely truthful, and paying rent on time could become an issue.

Inconsistent rental history: An inconsistent rental history may indicate a pattern of lease violations or instability and is worth considering when reviewing an application.

Criminal charges: While it’s important to follow the law and HUD guidelines when reviewing criminal history, criminal convictions could lead to issues later.

How To Legally Run a Background Check

Landlords should consider using TurboTenant to conduct tenant screenings and follow these steps:

• Get written consent through a form or application notice.
• Use a verified tenant background check service through TurboTenant.
• Verify the applicant’s identity and Social Security number to ensure they match.
• Review the reports once they arrive.
• Evaluate based on consistent criteria, including criminal and eviction history, while following state laws and HUD guidelines.
• If you deny an application based on a poor credit report, send an adverse action notice with the required details under the FCRA.
• Use TurboTenant to make the entire process quick, easy, and painless.