Topic: Rental history when screening applicants -- useful?

I'm trying to do some research on how helpful an applicant's rental history is during the screening process. It looks like only only RealPage LeasingDesk Screening and software affiliated with Rent Bureau (Yardi, Appfolio) currently offer the feature.

Does anyone use these services? In terms of importance of criteria, how does rental history stack up against an applicant's credit report? Does it cost extra?

Much appreciated,
David

CoreLogics has this and other helpful data. They have tons of research and results to substantiate their statistics.

As an opinion, I have found that with so many life-style changes in the past 10 years, it is impossible to give prior rental history much value in an overall rating of credit worthiness (aside from owing a community or eviction).

A good screening company should be pulling up-to-date eviction records which will catch the "bad" ones - CoreLogics does this.

FYI: I am not affiliated with CoreLogics. I was just a very satisfied user for 7 years.

Debra DeSmidt
LCAM, LEED Green Associate

Debra, thank you for your reply! I can definitely see how an eviction history can be a deciding factor. But what about a rental history that shows whether a renter pays on-time (or late)? Is that very helpful? It seems from the video below that those details can be useful. Would love your thoughts.

Another question for the forum -- has anyone dealt with a screening service that didn't "catch everything"? Or do they all consistently provide the same information?

Thanks,
David

I have managed a small property for 4 years and have studied our criteria, trying to find the right formula for good tenants.

I am convinced that all 3 of criteria below is the best to determine if a tenant will not skip and pay rent on time. However, they are rare.

1. Perfect credit payment history.
2. On the same job for more than 1 year
3. Rental history with no late payments in the past year

The key word is "responsible." "Stable" comes in next.

In regards to rental history, those without it or without home ownership, typically in my market live with family and pay nothing or very little. Their spending habits are hard to change once they get their own place.

I require a higher deposit with no rental history because I have seen too many move back home or in with someone else because they can no longer afford "the lifestyle they were previously accustomed to."

People on the job less than 3 months may be under the "3-month approval" by their employer and could be let go if they don't work out.

Credit history reflects responsibility. I have never missed a payment since I got credit in 1978. I plan for emergency financial situations. My husband was in the hospital nearly 3 months and we paid off our $12,000 bill to 3 hospitals by making our arranged payments.

Thank you, Sandy, for the really great explanation. You broke it down really clearly.

Out of curiosity, what screening service do you use, and does it provide you with the applicant's rental payment history? I noticed that not all screening services provide you with rental history. Or do you request a reference from a previous landlord?

In my market, I have a form I ask the previous landlord to complete. I have also found some "private landlords" who are not part of a large management company will lie about payment history because they like the tenants.

Another large local management company has stopped giving rental history information. They refer us to this website...

Our state has a website that I use to look for eviction filings, criminal activity, etc. I use a screening company that provides "eviction history" not their payment history. Can't think of the name of it. I think it is "Statewide Collections." They offer collections, too.

Here is a link to the state website: www.sccourts.org/caseSearch/

It has information for each county. It shows how many times someone has had an eviction filed on them. If their landlord files, which most companies in my market do, you'll see a record of it. You have to know how to read it to determine if they were just filed on or actually evicted. And, even then, it may not be an actual eviction. It also shows criminal activity and I have found this to be a more updated source for local infractions.

I own a consumer reporting agency that is FCRA compliant. From experience, here is what I think is important to know about a renter:
1. Verification of name, date of birth and SSN. A "no record" respo0nce does not mean the applicant
no record, but that incorrect to false information has been entered. This verification is all so
necessary to avoid a case of mistaken identity which can easily happen, and does especially
with foreign or common names, hyphenated or persons with more than one last name, and women
who have been married more than once.
2. Nationwide criminal background check including a DHS terrorist watch list.
3. Nationwide sexual offender, predator, and pedophile search. This is necessary to help comply
with laws, like Jessica's Law or Megan' Law.
4. A search of civil records in every county the applicant has lived for at least the past 5 years.
This is necessary to prove how the applicant handles his/her financial obligations-has there been
a suit for non-payment filed, eviction or foreclosure, wages garnished, a charge of "dead beat"
beat parent or spouse, other civil actions like a restraining order. I feel you need facts not
a number.
5. Employment verified and standing confirmed-is this applicant a good employee or about to be
fired or employment history-is the applicant receiving a pension or other compensation.
6 Former-not just current-landlords contacted. The current one may be glad to make this applicant
your problem, not his.
7. Reference who are not family members contacted.

If the applicant is denied rental bacause of any information revealed in the background screening, you should be given a letter of adverse action to give to the applicant describing his/her rights to appeal.

It is my belief that these screenings give a total picture of the applicant. Like I said, verification and accuracy is the key-you can not enter the applicant's personal information and hit "send" any more.

Hi! Please visit my web site www.goldshieldli.com. We provide hands on verified renter screening that is the most detailed in the industry.