Tenant Screening Providers

Choosing a Tenant Screening Company

Let us help you make the right choice

A background on the Tenant Screening Industry:

With over 1,000 tenant screening companies to choose from, picking the right tenant screening service provider can feel like an overwhelming task. The internet advertises many quick-fixes, all-in-one solutions, that seem simple to access and offer very inexpensive products. Like most things in life, you get what you pay for. Effective tenant screening involves obtaining detailed credit bureau history information from at least one of the three major credit bureaus, criminal background and eviction report data from state databases. This consumer information is protected by the Federal Fair Credit Reporting Act and Credit Bureau compliance. If a company doesn't require any compliance documentation or seems too easy; chances are you are receiving “proprietary” credit “scores” or risk analysis that is not analyzing true credit data from the applicant’s records on file with the credit bureaus. This can mean inaccurate information and making a choice that is not a well informed decision. In this section we will examine what to look for in a tenant screening provider as well as profile two tenant screening companies that we would recommend as competent tenant screening providers, US Real Estate Investors Association and Advantage Tenant.

Important points to consider when choosing a tenant screening provider:

Compliance- Protect yourself... and your investment

Consumer credit information is protected by federal law as well as strict credit bureau compliance. If a company has loose compliance standards or does not require documentation upon establishing an account, more than likely you are not receiving a full credit report on your applicant from one of the three major bureaus (Experian, Equifax and TransUnion). In order to obtain credit report data that is detailed with payment history, judgments, liens, charge-offs/collections and a FICO score, the credit bureaus require that you must present at the time you establish your account, a permissible purpose for the reports, a valid state issued ID, a copy of a professional license or proof of ownership of the rental property and submit to an office inspection to determine if your location is secure and meets bureau compliance. This may seem daunting, but the reality is ID theft and fraud is very real. These requirements are in place to deter and prevent fraudlulent access to sensitive information. When establishing an account with a reputable screening service, their requirements at signup, should protect you from hefty fines, keep you FCRA compliant and get you all the detailed information you need to make an informed decision.

Proper Screening Product Selection-

At minimum, a proper tenant screening should include a detailed credit report with score, a criminal background check, eviction report and social security verification on your applicant. Be wary of “proprietary” scoring models or risk assessment. A good screening provider should have the ability to obtain complete data from the credit bureaus, the same data that a mortgage company would use to make a decision. "Simple checks" are simply that, watered down information that is inexpensive and not very informative. Companies that offer a wide selection of screening products are the better choice since each applicant’s scenario is different and you will need products that fit unique screening requirements. This could include Canadian credit reports, global criminal checks for foreign nationals and business credit reports for commercial lease agreements.

Turnaround – I need a report and I need it now!!!!

Properly screening an applicant is critical as is making a decision quickly to retain your prospective tenant. Most credit reports and background checks can be done instantly online, while some more complex searches such as county criminal checks, employment and previous landlord verifications could take up to 3 business days. Look for a provider that can give you quick results through a secure website on essential screening resources like credit, criminal, eviction and social security verification.

Cost – I am new to this. What should I expect to pay?

As a property manager, landlord or realtor, most tenant screening costs should be covered by the application fee. This fee typically ranges between $25 and $50 depending on how in-depth the tenant screening you desire. Tenant screening reports that are very inexpensive should be a red flag. Cheap reports are simply that, cheap and do not include the detailed information you will need to make an informed decision and prevent a costly eviction. We have found that if your applicant does not want to pay for the tenant screening, they probably have something to hide or know that they will be denied. If this presents a challenge for you, offer the screening fee back to the applicant upon acceptance and create a win-win for both parties.