How to Run a Credit Check on a Potential Tenant

By: ROS Team

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Are you looking for a tenant? Don’t forget to check these tips if you are a first time landlord.

You know, one of the key things to look for in your prospective tenants is their credit history.

A credit history helps you determine their past financial behavior.

With a credit history, you can know their debt, loan amount, credit card limit, bankruptcies record, and other details. All these metrics help you figure out if they can pay rent on time before running into financial troubles. Generally, an existing credit report covers the past seven to ten years.

If they have a sound credit history and pay their bills on time, chances are they can pay their rent on time and keep the property well maintained.

Pay Bills

However, running a credit check on a tenant is not a straightforward process. It involves many steps. Above all, it should be done with the consent of the tenant.

Here are the steps you need to go through to run a credit check on a potential tenant.

Obtain Information:

First of all, follow the guidelines set by the Fair Credit Reporting Act.

Make sure to get your prospective tenant’s written permission for a credit check. The tenant should sign a document that mentions they agree to the credit check.

Once you are done with that, you will require their name, address, and Social Security Number or ITIN, which will be generally on the rental application or consent to background check forms.

Make sure to tell potential tenants the amount of any credit fee you are charging.

Do You Need to Submit Something from Your Side?

Most credit check companies might require you to submit your details to verify that if you are a genuine applicant requesting a credit check.


You might be asked to submit your address proof, ID proof such as license or passport, and proof of your rental property in the form of a deed, bills, and statement.

It might take a week to get your application approved. But once approved, it will be quicker and easier to perform credit checks on prospective tenants.

Where to Get Tenant’s Screening Reports?

You can ask credit bureaus like Equifax, TransUnion, and Experian to provide credit reports of your tenants. Although these are credit check companies, they provide tenant screening services and credit reports as well.

Screening Report

You can order reports online. Fees of the services vary based on the agency but generally are no more than 40$.

Some agencies provide you with the credit check in no time, while others might take some days to confirm the information.

Or You Can Ask Tenants to Do It Themselves:

You can also ask your tenant for a credit and screening report. This way, you can avoid the fee and other hassles if your tenant is not willing to pay the screening fee.

Collecting Credit Check Fees from Tenants:

It is totally up to you if you want to charge a credit check fee from tenants.

Some landlords don’t ask for a credit check fee as they fear that it might deter their renters.

You can deduct the fee from the first month’s rent or add it to their security deposit.

Collecting Fee

Make sure to only run a credit check on prospective tenants who first submit a deposit for the apartment and have filled out your application so that you know they are interested in the apartment.

Learn How to Analyze the Report:

Make sure to check the following points while going through the credit report.

  • Late Payments Bankruptcies
  • Eviction History
  • Unpaid Accounts
  • Large Amount of Debt (If a huge part of their income goes to pay off debt, they might have difficulty paying their rent on time.)

If the prospective tenant has a good credit history, they are likely to pay their bills on time.

But that doesn’t mean a tenant with a poor credit history should be rejected straightaway.

Credit reports are not immune to mistakes or the tenants have some other issues affecting their credit score. After all, hard times are inevitable. Maybe their spouse or friend carries a huge debt on their name or there could be errors on the report they are not even aware of.

Therefore, listening to their explanation costs nothing.

How to Reject Someone with Bad Credit

If you are not satisfied with their explanation, you can reject them through a formal process.

Mail an “Adverse Action” letter explaining that you have disapproved of the tenant’s application because of their poor credit history. The right reason should be mentioned. Also, provide them with the details of the credit check agency being used for their credit report.

Bad Credits

But Credit Report is Not Everything…

While a credit report can be a reflection of their financial status, it shouldn’t be considered the overall criteria. For example, their great credit score doesn’t stand for other traits such as getting along with neighbors and good behavior. Credit reports are not foolproof either. Scam artists know how to manipulate information.

Therefore, don’t let the renter move in unless they provide all important security deposits.

What do you think? Let us know by commenting below!

Read Also: Rental Property Inspection And How To Perform It Effectively?


Why is it Important to Run a Credit Check on a Potential Tenant?

Running a credit check on a potential tenant can provide valuable information about their financial history, including their ability to pay rent on time and any outstanding debts or financial issues. This can help landlords make informed decisions about who to rent to and can help reduce the risk of missed rent payments or other financial problems down the line.

What Information Will I Need to Run a Credit Check?

To run a credit check on a potential tenant, you will need to collect some basic information, such as the tenant’s full name, social security number, and current address. You will also need to get their permission to run the credit check.

How Much Does it Cost to Run a Credit Check?

The cost of running a credit check on a potential tenant will vary depending on the credit reporting agency and the type of report requested. Generally, landlords can expect to pay anywhere from $15 to $40 per report.

Can I Run a Credit Check Without a Tenant’s Permission?

No, you cannot run a credit check on a potential tenant without their permission. Landlords must have the tenant’s written consent before requesting a credit report.

What Should I Look for in a Credit Report?

When reviewing a credit report, landlords should look for any red flags, such as missed payments, outstanding debts, or collections accounts. Additionally, they should review the tenant’s credit score, which can provide an overall picture of their financial health and ability to pay rent on time.