How to Screen a Tenant: the one credit check for renters that you must do (and most don’t)

By: Donald Shelton

While there is always more to learn, years of comparing background checks of prospects to the results we’ve had after they became tenants have taught me a few things of value to share. The entire subject of how to screen tenants is more than can be covered in a single post, so this is one of a series.

For most, thinking of tenant screening means credit scores and maybe national tenant verification services like National Tenant Network . These don’t work so well in the majority of cases (other than a few exceptions like luxury and commercial properties). The algorithms for FICO scores are almost useless in my experience (the whole mortgage lending crisis was predicated on loans which only required certain FICO scores). Services like National Tenant Network have a catch-22 problem; it costs money to use them, so the vast majority of small and medium landlords and property managers don’t participate. If others don’t use it, the chances your prospect will show up in a report are less likely, making the service worth less to you. This is why we created services like jessaminelandlords.com which are free (plug: the tenant reporting at jessaminelandlords works for any Kentucky county – if you aren’t using it, you’re costing yourself money in bad tenants).

Criminal background checks and sex offender registry checks are musts and helpful in weeding out obvious situations, however most people won’t show up as problems in these serious areas. Something more is needed to catch riff-raff who aren’t convicted (yet) of something criminal.

The one background check you must do is to get the the eviction (forcible detainer) record.

We’ve found that tenants with an eviction in their past are much more likely to skip out on us than ones even with low credit scores or many other problems. We’ve found that tenants who are currently being evicted are near-certain to skip out on us within a few months. These are the losers you want to be sure to avoid.

Civil actions (evictions are civil) don’t show up in criminal background checks. You’ll want to think hard about a prospect who was evicted a year or two ago, or has had lawsuits over outstanding debts, and I think you’d be pretty crazy to approve someone who is currently being evicted (they always have a story that their current landlord is bad, or they’re in a bad neighborhood, etc. but for us it’s always turned out it was them who was a bad tenant). Credit bureaus are terrible at catching and factoring forcible detainers (evictions), but an eviction record is the single biggest indicator of a bad tenant in our experience. An eviction should have a similar (or in my opinion a greater) effect on future rental approvals for a tenant as a bankruptcy.

People who are being or are about to be evicted are looking for a new sucker/landlord. There are whole herds of these scam artists who hop from victim to victim in the same town. There is no way you’ll actually see their current landlord information on the application; they’ll either say they live with family, or even set friends/family up as a fake landlord for you to call. The only tip-off you’re likely to be able to find is a very recent forcible detainer (eviction) filing. After the filing they have 2-3 weeks typically to get out before being forced out. There are two ways to find recent eviction filings in Kentucky:

1) At the court’s searchable website: http://apps.courts.ky.gov/courtrecords/ where you can search by county, name, etc. I recommend making the search broad – just search on the last name – before narrowing it by putting anything in the first name field. You must keep in mind that this information isn’t 100% complete – sometimes something has been filed but not entered yet, and occasionally there are just glitches. The main thing to understand is that this information only shows currently active cases. This is not an effective way to do a full background search, but it can certainly tip you off to a current eviction in progress, even current criminal charges. You want to check this site again just before signing the lease to make sure something wasn’t filed in the meantime.

2) At the court clerk’s office. This is the gold mine, the source. A search here can turn up everything from traffic tickets to you name it. This is where you find information like evictions that aren’t current cases, in addition to current information. Most if not all counties have a computer terminal in the clerk’s office (this is the court clerk, not the county clerk) where you can do the lookup yourself. It also doesn’t hurt to make friends with the deputy clerks who work the windows. That way you might be able to get the information with just an email or phone call to them. There are sites which attempt to get this information online, and that is a great service you should consider using, but it’s labor intensive (they literally have to sit at the computer at the clerk’s and write it down), and seldom complete and current. If at all possible you want to get the search done at the court clerk’s.

Seeing any criminal actions in that county – down to the smallest citation – is a bonus of checking clerk’s records. You’ll even see cases where the prospect is merely a witness or even just makes bail for someone. It can certainly give you a more complete picture of their lifestyle, associates, etc. If you’re really curious, most civil and criminal actions are public; you can ask to see the file if the applicant is in a case. There could be all kinds of solid information in that file that you’d never be able to see any other way. Even if you don’t search at the court clerk’s regularly, you should do it a few times just to get a feel for how much is available to you there.

Category: Property Management, Tenant Screening

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