Before a landlord can rent an apartment out to a tenant, it is important to run a credit check. If they fail to check the credit of a prospective tenant, they risk renting out to someone who makes late payments consecutively and doesn’t have a good grasp on their financial state. Checking a tenant’s credit will look into their financial history and ensure that you are renting out to the right person.

Written Application
Before a credit check can be done, it is essential for potential tenants to complete a written application with their former landlords, employment record and credit history. Some landlords may also put onto an application that banking information and personal references need to be recorded as well. Many landlords request that the potential tenant cover the costs of the credit check, but it is up to the landlord if they want to do this.

Background Check
Once the landlord has all of the information, they can begin performing background checks. Contacting the prospective tenant’s employers will verify that the employment information on their application is correct and that they make enough money to afford the monthly rent and utilities. It is also necessary to contact their financial institution to find out if they have bad spending habits or overdraw their accounts on numerous occasions. Contacting any of their former landlords will give you a good idea of their payments as a tenant and if they will be a responsible renter.

Credit Check
Ordering a credit report is the only part of the process that will actually cost money and may take more time than the rest. A landlord can easily find a credit reporting company, such as Trans Union or Equifax, to verify the potential tenant’s credit history. Their credit check will also reveal any past evictions or convictions. The National Tenant Network is an agency that specializes in screening tenants, a tool that can be very helpful in the renting process. After contacting this agency you can begin to receive accurate reports on the applicants payment history and ensure that they are keeping up to date with any of their payments as a tenant.

The Importance of Running a Credit Check
Without a thorough credit check, the landlord has no way in knowing if the tenant is being honest with their financial history. Anybody can simply write that they have a good credit, but it is the landlord’s responsibility to follow through and ensure that they do.