Tenant Screening: Things Landlords Should Know

Tenant screening helps you identify the potentially ideal tenant who pays rent on time, respects your property and neighbors, complies with rental policies, and is communicative. Conversely, an ill-fitting tenant may cause sleepless nights, fall behind on rent, or damage your property.

Evictions cost $3,500 on average and can take as long as 3-4 weeks, so having an ill-fitting tenant may be a costly mistake.

So, how do you discern the ideal tenant from the potential ill-fitting one? Through a tenant screening process, you help identify a potentially reliable tenant with a steady income and a solid rental history.

What is tenant screening? Keep reading to learn more about tenant background screening and why it's important:

What Is Tenant Screening?

Tenant screening is the process landlords use to evaluate potential renters to determine their suitability for renting a property. This assessment involves several steps, including credit checks, criminal background checks, employment and income verification, rental history verification, and reference checks.

But what is a tenant screening report? A tenant screening report helps verify the information they've provided on their rental application and helps determine if they have a good history with rentals. This helps you avoid these tenant screening warning signs and select tenants who are more likely to :

Why Is It Important to Screen Tenants?

If you're not screening prospective tenants, it may be because you believe it will cost more. However, a 2022 CFPB national survey found that 68% of renters pay application fees, which help cover the cost of getting tenant screening reports.

Even if you're not charging application fees, screening tenants is often less costly than having to evict ill-fitting tenants. Here are a few reasons why you should screen tenants:

• Helping with timely rental payments: By reviewing an applicant's credit history and verifying work history, landlords can gauge their financial stability and likelihood of paying rent on time and identify potential red flags that a tenant might stop paying rent.
• Aiding in protecting your property: Screening tenants helps identify those who may have a history of respecting and maintaining rental properties, helping reduce the risk of potential property damage and costly repairs.
• Potential reduction in tenant turnover: Finding reliable tenants who are likely to stay for longer periods reduces turnover rates and the costs of finding new tenants.
• Mitigating eviction costs: Evictions are expensive and time-consuming. You can help mitigate the cost of evictions by screening tenants to help identify those with a history of reliable behavior to help reduce the likelihood of evictions.
• Building a positive reputation: Consistently placing responsible and reliable tenants can help enhance your reputation, attracting more high-quality applicants in the long run.

What Should I Look for in a Tenant?

Selecting the right tenant can help you maintain a successful and stress-free rental experience. When evaluating potential tenants, it's important to consider several key factors to help ensure they'll be responsible and reliable.

TransUnion tenant screening services assess applicants, covering many of these critical areas.

Here are a few criteria landlords should evaluate when choosing a tenant:

Credit History

A tenant's credit history reflects their financial responsibility and ability to manage debt. Look for a history of timely payments, a low level of debt relative to available credit, and an absence of serious negative marks like bankruptcies or charge-offs.

Income

Verifying a tenant's income helps ensures they can afford the rent monthly. SmartMove provides employment and income verification, helping give landlords like you confidence that the tenant earns enough income to afford the rent and their other living expenses.

Rental History

Rental history may show you how reliable the tenant can be. Look for a history of timely rent payments, positive feedback from previous landlords, and a record of taking good care of rental properties.

Background Check

Conducting a tenant screening background check aids in ensuring the safety and security of the property . This check should include a criminal history search to help identify any potential red flags.

Personal References

Personal references can offer additional insights into a tenant's character and reliability. Landlords should take the time to contact the references provided by the applicant. Speaking with previous landlords, employers, or personal acquaintances can help you understand the tenant's suitability for the community.

Best Practices for Tenant Screening

Using tenant screening best practices may help you find reliable tenants and protect your investment. Following a systematic approach can minimize risks and ensure a positive experience. Here are some tenant screening tips to consider:

Use a Comprehensive Application Form

Start with a thorough application form that captures all necessary information about the applicant. This should include personal details, work history, income, rental history, and references. A comprehensive application form provides all the details needed to evaluate potential tenants, setting the foundation for an effective screening process.

Verify All Information

Don't take the information provided in the application at face value. Verify all details through independent sources. Contact employers to confirm income and employment status, reach out to previous landlords to check rental history, and use services like TransUnion SmartMove to conduct credit and background checks.

Interview Your Tenants

An in-person or virtual interview lets you get to know the applicant better. Use this time to ask open-ended questions about their rental history, reasons for moving, and expectations. This personal interaction may reveal insights that aren't evident on paper and help you determine whether the tenant is compatible with your property.

Tools and Resources for Tenant Screening

The right tools can help you conduct effective tenant screenings. Using these resources helps ensure you select only the best tenants for your property.

Tenant Screening Services

Tenant screening services provide reports that cover various aspects of a potential tenant's background. Most landlords use tenant screening services to evaluate prospective renters.

One popular option is TransUnion SmartMove, which offers robust tenant screening reports, including credit checks, criminal background checks, eviction history, and the proprietary Resident Score.The right tools can help you conduct effective tenant screenings. Using these resources helps ensure you select only the best tenants for your property.

Credit Bureaus

Credit reports and scores can help you evaluate a prospective renter's reliability in paying their bills. TransUnionis one of the major credit bureaus, offering credit reports and scores to help landlords assess an applicant's financial responsibility.

These reports provide insights into payment history, credit utilization, and creditworthiness, helping to determinewhether the tenant is able to afford rent and manage their financial obligations responsibly. SmartMove simplifies the screening process, providing landlords with data to help make confident leasing decisions.

Rental History Databases

Accessing rental history databases is another effective way to screen tenants. These services track rental payments and eviction history, providing valuable information about a tenant's past behavior. By reviewing rental history, landlords can help identify applicants who have consistently paid rent on time and have had positive relationships with previous landlords.

Online Application Platforms

Online application platforms streamline the tenant application process and integrate with many existing screening tools. Platforms like Zillow Rental Manager allow landlords to collect applications online easily. These platforms enhance efficiency and organization, making it easier to manage the screening process.

Legal Resources

The Department of Housing and Urban Development (HUD) and local housing authorities provide valuable guidance on fair housing laws and landlord-tenant regulations.

Tenant Screening FAQs

How long does the tenant screening process take?

The tenant screening process typically takes a few days to a week to complete. However, TransUnion SmartMove has the abilty to deliver reports in minutes after the applicant verifies their identity, offering a fast and efficient screening solution.

What should I do if a tenant has no rental history?

If a tenant doesn't have a rental history, landlords can consider other factors to assess their suitability. This may include evaluating stable employment, strong personal references, or requesting a co-signer or guarantor to provide additional assurance.

Can I perform tenant screening myself, or should I hire a service?

While landlords can conduct tenant screening themselves, hiring a professional service offers several benefits. Using a professional service saves time, and helps ensure quality checks. TransUnion SmartMove offers tenant screening services, helping streamline the screening process for landlords.

Get Fast Tenant Screening with TransUnion SmartMove

Tenant screening helps landlords select potentially reliable tenants who pay rent on time, maintain the property, and contribute positively to the community. Effective tenant screening can help landlords avoid costly evictions, and protect their property.

TransUnion SmartMove simplifies the tenant screening process by providing quick, detailed reports that include credit checks, criminal background checks, eviction history, and our proprietary Resident Score. Trusted by 600,000 landlords and 4.4 million tenants, SmartMove is a robust tool for identifying great tenants, with 9 out of 10 users recommending it.