You’re a professional and understand how to manage risk. One of the tools in your arsenal is screening prospective residents – you know that making the right leasing decisions reduces bad debt and keeps occupancy high. With the economic downturn, proper screening is essential because more applicants have prior issues such as poor credit history or even a prior eviction.
Like most property managers, you’ll likely order a screening report on applicants and then call references. But if your screening report consists of only credit bureau data, you may not be getting the whole picture.
Property managers are more frequently turning to resident screening services that provide a comprehensive view of an applicant’s credit, eviction history, criminal history and other data.
A prospect’s prior rental history is a predictor of future rental behavior, so past evictions are relevant to a leasing decision. However, many court filings will never appear on the credit report. It simply makes sense to know whether an applicant’s former landlords have taken court action, and nationwide eviction database records that include initial filings and judgments can help you identify potential poor residents.
Many property managers go one step further and order a criminal background check and sex offender check. Whether you do this depends on many factors, including the type of property you manage such as public housing, your state requirements, and legal advice you may have received.
When you are reviewing the data, fair housing laws require that you consistently apply your screening criteria. You must also ensure that the information you use must comply with the Fair Credit Reporting Act and the consumer’s right to privacy. Of course, eviction and criminal data, just like credit data, has the potential for error. You must make an effort to confirm information to weed out potential inaccuracies.
Screening solutions abound. How do you find the solution that is right for you?
- Save keystrokes and potential errors – we’ve built resident screening right into AppFolio
- Give fast information so you can make a rapid decision and not lose a qualified prospect.
- Show prior nationwide eviction court filings.
- Give you the option of conducting a nationwide criminal and sex offender search.
In a weak economy, you may be tempted to reduce screening costs by ordering only a low-cost credit report. Yet at what cost? Getting a thorough screening report may actually be a form of low-cost insurance. If you are not screening your applicants adequately, your bottom line may be at risk.