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Picking a tenant can set the course for your life as a landlord for the foreseeable future. Is it going to be a smooth ride? Or is it going to be about missed payments and rental arrears? You should not leave it to chance. Which is why credit checks are a popular way for landlords to determine if an applicant will be a reliable tenant.
Although it is called a credit check, most landlords look for more than just the credit score, if at all. Landlords understand that rent payment history seldom gets reported in the credit bureau. Instead they look for a tenant screening service that provides landlords an insight into an applicant’s financial health, bankruptcies or delinquent accounts, and criminal history.
The Equifax credit report that Tenantcube provides its users has three parts-
Part 1: Tenant identification and report summary
This section gives you all the information you would need on a Tenant at a glance, before going deep into the details. It tells you who the report is about, their Tenant score- a recommendation on whether they would be a good tenant, based off of their financial and background check, an overall summary of whether they passed/failed any check and a risk assessment.
Part 2: Background check
This section gives a detailed account of the tenants
The employment history gives you details of where they worked, their role and for how long they worked there, going back at least 10 years. The residential history provides a list of addresses they lived at both inside and outside the province, while the education history does the same with all the education institutions and courses they attended.
Part 3: Financial details
This is probably one of the most important parts of the report that you, as a landlord, may be interested in. It has
You will be able to see how much debt they have, how much payment they are on the hook for each month, if they have kept up with their payments, and if they would be able to make those payments combined with the monthly rent for your property comfortably.
You will also be able to see if they have filed for bankruptcy before or flagged for fraud all of which greatly speaks for or against an applicant on the decision for tenancy.
When reading a credit report it is important to consider a few factors and not take in the numbers as is. Of course, if the report is extremely good, you may proceed with the reference checks and further onboarding processes, and for a bad report with low score, a number of missing payments and with other red flags, you may do well to skip the application.
However, if they had a few intermittent payments at first before correcting their course, it would be a good idea to give the tenant a chance to make their case. They probably had a rough patch financially, before getting a better job to be able to make their payments.
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Tenantcube Inc. or its affiliates.
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