Tips on How to Check Your Credit

Tips On How To Check Your Credit - Credit, Rental, Lease

Looking for the right tenant for your property?

If you’ve done day to day tenant searching, you probably now have a list of potential tenants in your hands. 

But this list doesn’t guarantee that you already have the right tenant. Some screening should be done to determine which tenant is fit for the leasing.

To be an effective property manager, you should take action to find the right tenant. It’s highly suggested to do a detailed background check that includes a credit check for each applicant.

Therefore, you need to know how to check your credit. Being able to know how to check credit as a property manager is one of the skills you need to have.

This article will help you know how to check your credit for property managers.


How to Check Your Credit for Property Managers

When developing your background check, you should understand the entire process of performing it. 

Understanding what’s on a credit check is the first thing you should know.

If you understand what’s on a credit check document (also known as a credit report), you’ll know how to use it to pick the right tenants.

That’s a big part of learning how to check your credit as a property manager. 

A good way to learn how to check potential tenants’ credit records is to do it on your own first. That’s why it pays to learn how to check your credit first.

It gives you a context for evaluating applicants’ credit reports afterwards. After all, if you already know how to check your credit, you know how to check someone else’s.

So now let’s talk about what a credit check is, so we can figure out how to check your credit.

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What Is a Credit Check

A credit check is a way of verifying the credit history of a potential tenant. This credit checking serves as an indication of a person’s eligibility for a possible tenancy. 

This is what a property manager must do prior to choosing a tenant. Learning how to check your credit can help you learn one of the most important steps in tenant screening.

Credit check is defined too as a historical representation of how the tenant pays their bills and financial obligations. 

Also, it reveals if they ever had any evictions or credit judgments against them.

Take a look at your own credit report as you learn how to check your credit. You should see information of this type on your credit report (if applicable).

That means you can safely expect to see it on potential tenants’ reports too, if such information exists for them.


The Need for Credit Check

Credit check helps in determining financial eligibility of a potential tenant through a meticulous process. 

It can also detect possible issues that you will be encountering during the property leasing.

This check will help you see recurring patterns of either good or bad payment tendencies in a person’s credit history. 

That tells you why learning how to check your credit is important. Learning how to check your credit lets you identify the patterns in your own financial history.

If you can do that for yourself, you can do it for someone else. 

So again, learning how to check your credit teaches you how to analyze future tenant applicants’ credit reports.

Since a credit check reveals how these potential tenants paid before, you can make this directly as one of your bases for tenant selection. 

Through the way they made payments, you can conclude whether or not they are suitable for your leasing.

Another benefit of running a credit check is that you can identify the identity of tenant by their credit profile information. 

Through this, fraudulent problems that may occur in the future can easily be avoided.  

Lastly, this will also help to ease the job of filtering tenant applications. You can easily compare each applicant’s credit against each other to find the best tenant.


What Property Managers Should Check

It’s important that property managers should know how to perform a credit check. 

Also, they should know which parts of a credit report to pay attention to. 

When learning how to check your credit, try to go through every item of the report and study it as though it were a potential tenant’s report.

Which parts would you find most important as a landlord? That’s how to use learning how to check your credit as a learning experience for property management.

A property manager can assess the potential tenant based on a credit report. This credit report can be done by the Credit Reporting Agencies (CRA). 

Check all payment accounts for late payments or non-payments. Address these with the applicant to understand or resolve past issues

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What to Look for in Credit Reports

Property managers need to know what they should look for in a credit report. It’s part and parcel of learning how to check your credit.

This starts with knowing the payment history and patterns of each potential tenant. Doing so will help you determine whether or not they are a good-paying tenant.

The second thing to look for is their recorded delinquency and ongoing debts. 

As a property manager, you need to be aware if these potential tenants have any ongoing debts. 

The amount of their debts can help judge if you should pursue the leasing with this particular tenant.

In checking a credit report, a potential tenant should meet the overall credit score standard that you will set. The overall credit score should be higher than 650 for a good tenant.


Other Details to Look for in Credit Reports

Other details that property managers should look for in a credit report is the possible bankruptcy of a potential tenant. 

Near bankruptcy-status tenants might have problems in paying for the rent in the future. It’s your decision whether or not to proceed with this kind of tenant.


What to Remember When Checking Credit

When finding out how to check your credit, you’ll run into credit scores. These are approximations of the health of a person’s credit.

Property managers should look for credit score that is higher than 650. 

This score shows that tenant has a good payment history. Besides, it shows that a potential tenant is financially responsible.

Review other online sources to verify identity and determine financial abilities to pay rent.  Determining financial abilities include checking credit reports, social media, bank statement and county records.

Another way is to interview a tenant physically. Interview tenants and review all their credit reports to resolve any bad credit references or past financial issues reported. 

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Whom to Use When Completing a Checking Credit

The best way to efficiently complete credit checks is to find and use agencies that offer services of tenant screening. 

Collect credit data on credit bureaus such as Experian, Equifax, and TransUnion. These bureaus normally offer the best and most complete credit reports, so you’ll have to go to them for how to check your credit.

Make the credit check part of the tenant application process. Firstly, you need to have a signed authorization to start and complete credit checks. 

You then need to provide the tenant an application form that they will fill up. The scope of the application form will include the completion of credit checks. 

If the tenant asks for a copy of a credit report, it’s better to run a new credit report. This allows you to give them a new copy of an application form. 

The same content of the original form should be written on this copy. Through this, you can avoid any fraud or under-reporting of credit issues. 

Final Thoughts on How to Check Your Credit

In this article, I talked about the tips on how to check your credit for property managers. 

To be an effective property manager, you should know how to check your credit. If you do, you’ll know how to do it for each of your potential tenants. 

This checking of credit must be detailed as possible. A credit check will help you with the leasing process by detecting the right tenant. 

Credit checks serve as a basis for selecting potential tenants since they provide information on a person’s eligibility for a possible tenancy.

If you have questions regarding credit checking, please add your comments below.

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