Many landlords use credit checks to screen and select tenants. Credit checks are available from several sources, including tenant screening and background investigation services.
Credit Check
A "credit check" is an evaluation of an individual's credit report, which includes information about the individual's debts as well as her payment history. Credit reports also include information about bankruptcies, evictions and judgments.
Tenant Screening
Most landlords screen their tenants before offering them a lease. The screening may include a criminal background check, verification of the tenant's employment, contacting previous landlords, as well as a credit check.
Sources
Property management companies and tenant screening services often have direct accounts with one of the major credit bureaus. There are also online credit report and background check services that landlords can use on their own.
Rental Application
The landlord will need a potential tenant's permission to run a credit check. Most rental applications will have a clause that authorizes a landlord to pull the applicant's credit report.
Warning
The Fair Credit Reporting Act requires a landlord to inform tenants and potential tenants if she uses a credit report to take an adverse action. If a landlord denies an application, requires a co-signer or demands an extra security deposit because of an applicant's credit history, she must send written notice explaining this.
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