5 Tips on How to Read a Background Check and Credit Report

5 Tips on How to Read a Background Check and Credit Report

5 Tips on How to Read a Background Check and Credit Report

1. Don’t worry about the recommendation. Look at the score.
You don’t need to care about the recommendation that the screening provides, you need to care about the score. While you may never approve a candidate that wasn’t approved on their background check, you may not always approve some candidates that were “approved” on these checks either.

2. Don’t dwell on the credit score; care about the “guts.”
Similar to the point above, the credit score can be very misleading. You screen people who have tons of late fees, high balances, and more-, things that typically disqualify them from your rental. On the other hand per the system they have a great credit score. You may also see others who just haven’t had a lot of bills. While for various reasons you may occasionally choose to not approve those with high credit scores due to other factors, but choose to never approve a tenant with a score a low credit score (below 500).

3. Look at the late payment.
When reading the score you want to look at how many times they have been late on a payment or not paid at all.

4. Look at how much credit they have out.
If their credit card is maxed that would be a red flag, and you should ask questions. While sometimes it is for a direct reason such as an 0% interest card, other times it means that one of those unexpected life “issues” could cause the whole deck of cards to fall.

5. Review the background check in detail.
Many instances can show on a background check, for example auto tickets. So make sure you look at all of it in detail and not missing anything.

So review your findings. If it is an eviction or something that is going on currently, you may choose not to rent to the applicant. If it is something older in their history, and it won’t impact their ability to pay, then you may choose to select them as a tenant. The key is to figure out what your criteria are ahead of time so that you can apply your policy equally across the board and not have trouble with fair housing laws.

Looking for a great background and credit check company?

We recommend and love TurboTenant.

What has been your experience with reading background checks and credit reports? Do you have any tips?

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