Tenant screening reports are a specialized type of “Consumer Report” as defined by the Fair Credit Reporting Act (FCRA). Tenant screening reports nearly always include:
1. A consumer credit report – provided by one of the three national credit reporting agencies (Experian, Equifax and Transunion. There was a time when some landlords opted for reports from all three bureaus – unnecessay today since most creditors report to all three.
2. An eviction search – a search of the public record for unlawful detainer claims against the applicant.
3. A criminal records search – a search of the public record for evidence of criminal activity on the part of the applicant. The criminal records search may also include a national sex offender registry search and the U.S. Treasury Department’s Specially Designated Nations search (often referred to as an OFAC search).
4. An Employment (income) verification – though landlords often rely on pay stubs these day, given some employers’ reluctance to respond to employment verifications.
5. Rental verifications – to confirm current and previous address history and to determine whether the applicant complied with the terms of their rental agreement – whether they can be counted on to do so going forward.
6. A recommendation – based on application of the landlord’s criteia to the content of the tenant screening report.
Some assume all tenant screening reports are alike – until disaster strikes – until harm comes to persons or property due to a missed criminal record. Or my favorite – considerable time and treasure are spent removing a serial evictee – due to a recent (missed) eviction record.
Credit is largely a commodity these days. But there is a great deal of difference in the completeness and accuracy of public record searches. We know from experience that approximately 1/3 of valid criminal and eviction hits are the result of conditional searches – searches of AKA’s and additional addresses (beyond those listed on the application).
Many (perhaps most) tenant screening companies conduct static searches. They search the name and date of birth provided on the rental application. It is important to search additional names and addresses found in the credit report – since it is common practice among those with records to “forget” about any addresses associated criminal records – or those who at the time, were know by a different name.
Changing date of birth by a day or two – or a year – is a good way to avoid detection. The bottom line is you need a trained investigator to see those things and do the work necessary to “discover” the truth – to provide you with the information you need to make good decisions.
Finally, rental references may be old school, but they are more important than ever due to limits placed on access to, and reporting of public records (particularly eviction) data.
Ultimately, both content and quality are critical. It pays to look beyond what is included in a tenant screening report – to consider how the information was developed and whether derogatory findings are confirmed.
Almost as important as what is what you do not want in your reports. You want nothing in the file that speaks to race, ethnicity, national origin, etc. Information regarding victims of domestic abuse – a protected class in some jurisdictions – has no place in your files. You get the idea!
Next topic: Criteria