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Tips for tenant screening

Tenant screening helps minimize the risk of renting to high-risk applicants.

Man and woman standing in an empty house.

Tenant screening process

As a landlord, you can create tenant interest by writing an effective rental listing. It's common for landlords to make this huge mistake: only requiring a rental application and meeting their tenant at a showing. This method leaves room for error when deciding if a prospective tenant is qualified. Here are a few things to be mindful of and include in your screening process.

  • Let the prospective tenant know that you do require a tenant background check.
  • Provide the potential tenant an avenue to apply either online or on paper.
  • Perform a screening of the applicant and evaluate it.
  • Meet the potential tenant in person, if possible, to evaluate:
    • Inconsistent answers,
    • Reluctance to complete a credit or background check,
    • Delayed communication or expressing disinterest, or
    • Disrespectful behavior at your property showing.

It is important to create a consistent screening process that honors all Fair Housing Act laws that protect tenants from discrimination. Some of these laws include protected classes such as gender, family status, sex, disability, national origin, religion, color and race. Talk to a lawyer if you have questions.

How can I check a tenant's credit?

There are several ways to get a tenant credit report, but the easiest solution is using an online service. As soon you enter their email, they'll receive a notification asking them to authorize the reports by entering their Social Security Number. Shortly after, you'll get an email stating that the report is ready to be viewed.

Is the tenant financially responsible?

Credit scores range from 350 to 800. Typically, the higher someone's score is, the more financially responsible they are. Beyond the credit score, credit reports reveal even more information: red flags, account summaries and tradelines.

  • Red flags are typically indications of potential fraud, and this information is gathered based on a tenant's residence history and employer info.
  • You'll be able to view a tenant's current monthly balances organized by account type and their current debt load.
  • And last, you'll view a tradeline of each open account complete with payment status, so you know whether they have a history of making payments on time.

What can be considered in a decision?

As a landlord, you're allowed to decline a tenant for not having enough income, not being financially responsible or having too many financial obligations to afford your rent price.

However, you're required to tell a tenant if you're rejecting them due to information on their credit report, according to the Fair Credit Reporting Act. This gives tenants the opportunity to dispute any information on the credit report with the credit bureau.

Before making your final decision, we also recommend requesting two more important reports: background and eviction reports. With all three reports, you'll get a complete view of who your applicant is.

  • Credit reports tell you how your applicant treats creditors and their finances,
  • Tenant background checks tell you how they treat society and neighbors, and
  • Eviction reports tell you how they've treated prior landlords.

Tenant insurance

In some cases, landlords may want to verify the applicant is obtaining or has renters insurance to protect their personal belongings and any damage to the property. Like a tenant’s credit score, requiring proof of renters insurance might be an indicator of a potential tenant’s ability to pay rent on time.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.



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