The best forecaster of future behavior is past behavior. This is why credit check and criminal background check are so important. You will get a better understanding of how responsible and reliable your prospective tenant is. You can never have too much information. All of the information you gather will help you make an informed choice when selecting a tenant.
So you might be asking yourself what is a credit report? A credit report is a compilation of information on how someone handles their credit and debts. It includes information on how much debt they have accumulated. If they pay their bills on time, partially and other relevant information on payments. Where they live and work, as well as if they have filed bankruptcy and if they have any lawsuits.
Remember you need a lawful purpose and permission in order to pull someone else’s credit report. So always have a written and signed permission from the prospective tenant before pulling their credit. You will need their full name, address, date of birth and social security number in order to identify them to the credit reporting agencies. The three major reporting agencies are:
- Equifax
- Experian
- TransUnion