Landlords can do credit checks on potential lodgers. The interactions between the lodgers and the landlord involve money, so it is necessary for landlords to find out the past credit records of potential lodgers. This will ultimately help prevent the possibility of landlords and tenants running into any credit-related quarrels in the future.
Credit checks will help landlords to get to know more about those they want to rent their properties to. It will enable landlords to confirm the personal information provided by the lodgers such as their name, address, employment history, and social security number. Landlords can also access other relevant information about their potential lodgers, such as their credit history, including a list of banks, loans held, credit cards, mortgages, etc. As well as public records including tax issues, history of bankruptcy, and history of eviction, if any.
Landlords are not, however, expected to wake up one day and start immediately running credit checks on potential lodgers. The consent of the prospective lodgers must be secured first, and this must be in writing. If a prospective lodger denies their consent/permission, it means that the landlord cannot access the credit records of the potential lodger. If, on the other hand, the lodger gives their permission, the landlord can then proceed with the process by providing a form for the potential lodger to fill out. The form should have entries for Name, Current Address, Address for the Past Two Years, Date of Birth, Current Employer, and Social Security Number.
After obtaining the required information from the lodger, it will then be handed over to a Credit Agency, of the Landlord‘s choice, for the checks. Meanwhile, as the agency is working on the check, the landlord may decide to carry out some basic checks like the name, current employer, and the current address of the lodger.
Once the result of the check is available, the landlord should look out for the following: record of late payment, record of financial instability, evidence of eviction, huge debt, and evidence of lawsuits. If the check contains any or all of those, then the lodger has a bad credit history. The landlord should also look out for evidence of fraud, or if the lodger has lied in the references provided.
In the case that the potential lodger has bad credit, has been involved in fraud, or has falsified any of the references, it is not advisable for the landlord to take on the lodger. Someone like that can simply not be trusted.