Tenant screening has always been an essential step in the rental process. It helps you assess prospective tenants using factors that indicate whether they would be a good fit for your rental property.
Many landlords only look into credit scores, since they show a renter’s payment habits. However, that may not be enough. Property management companies like Bickerstaff Parham use comprehensive screening criteria, and here’s why.
Key Highlights:
- Credit checks provide useful insight into an applicant’s financial habits, but they do not offer a complete picture of a prospective tenant’s reliability, behavior, or suitability for a rental property.
- A comprehensive screening process should include rental history, employment and income verification, criminal background checks, and landlord references to help reduce leasing risks.
- Reviewing rental history and speaking with previous landlords can reveal important information about payment consistency, lease compliance, property care, and overall tenant behavior.
- Verifying income and employment helps ensure applicants have the financial stability needed to afford rent and meet their ongoing lease obligations.
- Landlords should use consistent screening criteria for all applicants and comply with federal, state, and local housing laws to promote fair, legal, and effective tenant selection practices.
Why Aren’t Credit Scores Enough to Assess a Tenant?
Credit scores and histories don’t tell the whole story. You can miss many red flags if you limit yourself to credit checks. There’s more to a tenant than their ability to pay rent on time. While it can provide valuable insight about someone who might live in your rental property, it’s not enough when finding new tenants.
The screening process should evaluate multiple factors to help you make informed leasing decisions and reduce the risk of issues such as property damage and lease violations. Furthermore, it can penalize good tenants.
Some applicants may have low credit scores due to medical expenses, student loans, and other financial hardships. They can still be responsible tenants with strong rental histories, so you would benefit more from being thorough with the screening process.
Which Screening Criterion Should You Use?
Here are a couple of factors to consider beyond credit checks.
Rental History
An applicant’s rental history enables you to paint a clearer picture of what their future behavior will be like. For instance, an applicant with short stays in rentals despite long lease terms may mean they are often evicted or don’t abide by the agreed-upon lease terms.
You can call previous landlords to learn more about a potential tenant’s payment consistency, property maintenance habits, lease compliance, and overall tenancy experience. Be careful not to base your decision solely on landlord references; use them only as a factor.
Employment and Income Verification
Confirm whether an applicant has a stable income sufficient to cover your rent. Most landlords require applicants to have an income that’s twice or three times the monthly rent to prevent financial strain.
To verify their income, you can ask for pay stubs, employment letters, tax returns, or bank statements. Other factors tell you about the applicant’s past, but their current income and employment can provide assurances for the present and future.
Criminal History
If you have a multifamily rental property, you need to be more careful with the applicants you approve for the safety of your other tenants. Background checks can help you uncover past convictions and determine whether their history could affect the property's living environment.
Always comply with federal, state, and local laws to avoid potential legal issues. Keep in mind that you can only deny housing based on arrests with convictions. You could end up violating Fair Housing laws if you justify rejections with unrelated convictions. The best thing to do would be to consult a legal professional to be sure.
Calls to Previous Landlords
If you do evaluate their rental history without calling previous landlords, you might want to add this to your criteria. Some qualities cannot simply be evaluated through records and documents, such as reliability, responsibility, and character.
By calling landlords, you can find out about past behavior that credit scores or income verification can’t tell you, such as hostility towards other tenants or negligence with property upkeep. You might even spot applicants who put down fake references.
Ensuring Legal Compliance During the Screening Process
Being thorough is good for your rental property, but only if you follow the landlord-tenant laws that concern you, your property, and potential tenants. You can’t just set a personal standard without thinking about whether it’s fair or not.
Your standards should reflect a renter’s qualifications and nothing more. The best way to ensure that is to either stick to the most common criterion landlords and property managers use, or research the rental laws that you might be violating if you go above and beyond.
It would also benefit you to establish a standardized process in which all applicants are assessed using the same criteria. Not only will this streamline your tenant selection process, but you could also avoid potentially discriminatory practices.
FAQs
Are credit checks enough to screen potential tenants?
- No. While credit checks provide valuable information about an applicant’s financial history and payment habits, they do not reveal important factors such as rental behavior, property care, lease compliance, or overall reliability.
Why shouldn’t landlords rely solely on credit scores?
- Credit scores do not tell the whole story. Some applicants may have low scores due to medical debt, student loans, or temporary financial hardships, yet remain responsible tenants with strong rental histories.
What other factors should be included in tenant screening?
- A thorough screening process should include rental history, employment and income verification, criminal background checks where legally permitted, and references from previous landlords.
What is the best approach to tenant screening?
- The most effective approach is a comprehensive screening process that evaluates multiple factors rather than relying on a single criterion. Combining credit checks with rental history, income verification, background checks, and landlord references provides a more complete picture of an applicant's qualifications.
Optimizing Your Screening Process with Zero Risks
Screening tenants can be time-consuming, and without proper procedures, you may miss key factors or even violate rental laws. The good news is that you can delegate this task to professionals who have done this a thousand times over.
Bickerstaff Parham uses comprehensive screening criteria to find the right tenants for your rental property. We dig deeper to ensure that your rental business remains profitable and minimizes problems down the road.
Contact us, and we can explain what our property management services include.
More Resources:
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Georgia’s New Rental Application Fee Rules: What Columbus Landlords Must Know
