Rental properties can prove to be a lucrative investment. However, the key to gaining a significant return on your investment is finding the right tenant. Running a credit check is one way to judge whether a tenant will pay his rent on time. Tenants with a positive credit history are usually less of a risk than tenants with poor credit. Run a credit check on all applicants to determine whether or not you have a good or bad prospect for your rental property.
Ask the tenant to complete a rental application for your property. The rental application should request information on the tenant’s current employment, residence and Social Security number. A Social Security number is necessary to run a credit report. Include a clause on the application requesting permission to run a credit check as part of the screening process.
Sign up for a landlord background check service such as E-renter or the National Association of Independent Landlords. Charging an application fee helps you to cover the cost of the credit check for the prospective tenant. Some services require you to sign up for an extended subscription, while others offer services for a one-time fee.
Choose the option to perform a credit check inclusive of a score and credit report. Most services allow you to save the credit report and score or print it for your records.
- "Investing in Real Estate"; Gary W. Eldred; 2009