Credit Checks Are Step 1 in Tenant Screening Services
All property managers should perform tenant screening services prior to allowing a new tenant to move into their house, apartment or condo. But this can be a tedious process, and if not performed correctly, a waste of time. It’s a smart idea to turn this chore over to SLC Properties.
Any property owner knows that it’s critical to get the right tenant. Making a mistake with this choice can lead to a host of problems that could go on for months, costing you thousands.
Likely the most important quality you want in a prospective tenant is their demonstrated ability to pay the rent in full, on time.
Thus, the first step you need to take when a tenant hands in their application is to run a credit check. But what is an acceptable credit score?
Tenant Screening Services: Credit Checks
The best credit score is 850, but a score this high is rare. Only 20 percent of people have a score between 800 and 850. Experian says a score of 740-799 is very good, 670-739 is good, 580-699 is fair, and below 580 is poor.
To qualify for an FHA mortgage with 3.5 percent down, homebuyers need a credit score of at least 580. They may be able to get a mortgage with a lower credit score, but they will pay higher interest rates or have to put more down.
Determining prospective tenants’ credit score can help you gauge the risk you take when you allow them to move into your property. But when you pull their credit report, it not only tells you their score, it tells you why they have the score they have.
What Can You Learn from a Credit Report?
Have they made late payments on rent before? The credit report will probably tell you. It will also tell you if they are making their student loan payments on time as well as car payments, credit card payments and payments on any other types of debt.
If the report shows delinquent payments, you can see when these payments were missed. Items on a credit report eventually are removed, so you will likely only be able to see the last seven years of data.
The dates of the missed payments may have some bearing on your decision to find them to be reliable tenants. For instance, they may have missed payments four years ago during a time of unemployment, but since then have been making payments on time.
With tenant screening services, it is sometimes necessary to interview the prospective tenant for an explanation as well.
Credit Checks Are Just Step One
Making sure a prospective tenant is a good credit risk is only part of the process. You also have to do a criminal background check and call previous landlords for references. It takes time.
That’s why you’re better off relying on SLC Properties for tenant screening services. We perform thousands of screenings, so you can rest assured we do a thorough and efficient job. And we do it quickly, too! An apartment sitting empty costs you money, so the sooner you fill it, the better.