Renter Background Screening- How to Understand a Tenant’s Credit Report

Renter background screening includes verifying the personal details such as Social Security Number, name, date of birth, address etc. as mentioned by the potential tenant. A crucial document in a background check for a renter is his credit report. As the name says, all of us can comprehend that this report is related to the credit history and payment background of the person. But still landlords can get confused while reading this report for the first time. We will learn about the various sections of a credit report and how to understand them here.

 

A renter credit check report is broken down into four major portions:

• Personal details
• Credit Summary/ Credit Inquiries
• Account History, and
• Public Records

 

The personal details section mentions the potential tenant’s name, address and workplace details. This can also consist of past residential addresses and companies where he/she was employed. Landlords need to know here that the name is often misspelled or is a variant of the actual person’s name. Care should be taken by the landlord to get the accurate name and SSN of the prospective renter.

 

A background check for renter summarizes the information about the several kinds of accounts that the potential tenant is in possession of in the credit summary section of the credit report.

 

These are:

1. Real estate accounts, including any mortgaged owned by the applicant.
2. Credit card accounts
3. Loan accounts where installments have to be paid.
4. Collection accounts

Besides these accounts, this section also mentions the total number of open/closed accounts in public record databases and the total number of inquiries that were made for your account in the last two years.

 

The account history section is the heart of the credit report as it contains in-depth information about the way the tenant has made loan payments and how much of it is still due. Every credit account will mention information such as the creditor name, account number, account type, monthly payment to be made, account opening date, balance, credit limit, highest amount charged, payment status and history and so on.

 

The public records have details about bankruptcies, judgments, state and county court records, and overdue child support- basically all the major financial mistakes that the applicant might have done.

 

Now the next time any landlord decides to run a renter background screening, he can use the above tips for reading the credit report.